Page 1       TOP OF DOC


U.S. House of Representatives,
Committee on Banking and Financial Services,
Washington, DC.

    The committee met, pursuant to call, at 10:10 a.m., in room 2128, Rayburn House Office Building, Hon. James A. Leach, [chairman of the committee], presiding.

    Present: Chairman Leach; Representatives Roukema, Bereuter, Lazio, Royce, Lucas, Fox, Kelly, Weldon, Ryun, Manzullo, Foley, LaFalce, Vento, C. Maloney of New York, Gutierrez, Barrett, Hinchey, Ackerman, Bentsen, Jackson, Kilpatrick, Hooley, Weygand, Sherman and Lee.

    Chairman LEACH. The hearing will come to order.

    This hearing is a continuation of our review, begun in December of 1996, of the too-neglected history of the traffic in Nazi-looted gold during World War II and its disposition afterward, of the theft of Holocaust victims' assets, and of belated postwar restitution efforts.

    We began our hearings a year-and-a-half ago with Under Secretary of State Stuart Eizenstat, who has so commendably led the American Government on these matters. Partly in response to U.S. leadership, more than a dozen countries have created commissions to study their own pasts, and the Vatican has come to issue an historic acknowledgment—what is called ''an act of repentance''—that the actions of the church in the face of unspeakable crimes against mankind were, in important instances, morally deficient.
 Page 2       PREV PAGE       TOP OF DOC

    This morning, we will hear again from Secretary Eizenstat on the findings of an interagency task force that he coordinated, which examined the role of neutral countries—Argentina, Portugal, Spain, Sweden, and Turkey—in the handling of Nazi gold and other looted assets during and after World War II. Switzerland had been the subject of a previous U.S. Government study and previous hearings.

    Today's report, based on hundreds of thousands of heretofore classified papers, provides compelling historical evidence of large-scale cooperation with the Nazis by certain nonbeligerant countries. Together, these countries supplied Germany with hundreds of millions of dollars worth of strategic materials, enabling Hitler's regime to keep fighting for as long as two years longer than it would have been able without such assistance. Swiss and Swedish banks, for instance, knowingly looted from occupied countries which were used to pay for war-related materials in witting defiance of Allied requests.

    Neutrality in the face of evil, at a personal or collective level, is worthy of review by citizens of any age, particularly this one where human relations have become complicated by unprecedentedly inventive instruments of war. If we, as legislators, are to discharge our public duties responsibly, we must develop an understanding of the evil in the Holocaust.

    Why did neutral countries—or, more precisely, their governments, because public sympathies often were with the Allies—agree to cooperate so thoroughly with the Nazi regime? The answers may be different for each country and remain ambiguous for all. For Sweden and Switzerland, threatened as they were on all sides, the principal, although not only, reason may have related to concern for national survival. For Spain and Portugal, economic advantage coupled with the pro-Nazi sympathies of their leaders, Franco and Salazar, come more to the forefront. For Argentina, which was an ocean away from the fighting and had little need to trade with Germany, there appears to have been some attraction to Hitler's authoritarian creed and a desire to demark itself both from U.S. influence in the hemisphere and from political instability in other Latin countries.
 Page 3       PREV PAGE       TOP OF DOC

    Inquiries into the nature of evil and how to behave in the face of it are not the normal stuff of congressional hearings. In this case, however, such questions are relevant not only to the behavior of all countries involved in World War II, including our own, but to the question of establishing retrospective justice and to the broader responsibility of each generation of leadership to learn from the past.

    The wartime leaders in the neutral, nonbelligerent countries who made the painful moral choice to cooperate with Hitler's brand of totalitarianism often behaved in contradictory ways. The Swedes, for example, allowed German troops to transit their territory from occupied Norway and even escorted German ships in the Baltic Sea. On the other hand, they helped 7,000 Jews escape from occupied Denmark and find a safe haven in their country. Raoul Wallenberg, a young Swedish diplomat, saved thousands of Hungarian Jews from deportation while members of his powerful industrial family were doing brisk business with the Germans.

    We have no reason not to take pride in the great sacrifice of America's armed forces in combating the Wehrmacht. But we must also remember that we did not open our doors to Jewish refugees during the war, even after our leadership had learned that Hitler had marked European Jews for extermination. We accepted only 21,000 Jewish refugees during the war, fewer than Switzerland in absolute terms and fewer per capita than most other neutral countries.

    These moral quandaries are also central to the restitution issues reviewed in previous hearings. As one of our witnesses today, Leora Batnitzky, notes in her statement, the Nazis robbed Holocaust victims not only of their possessions and their lives, but also of the memory of their existence on this earth. Thus restitution for Nazi crimes must encompass more than material compensation. Indeed, Professor Batnitzky suggests that restitution efforts are morally offensive unless accompanied by acts of repentance.
 Page 4       PREV PAGE       TOP OF DOC

    Our century has been indelibly marked by the Holocaust, and our perception of human nature has been profoundly altered by it. As Professor Larrimore puts it, ''The map with the help of which we try to orient ourselves as human beings trying to live good and decent lives is a map with Auschwitz on it.''

    Immediately following the conclusion of this hearing, I would like to proceed with a markup of H.R. 3662, the U.S. Holocaust Assets Commission Act. It has been developed with the support of the Administration to assist the United States Government and the American people in a review of certain ramifications of the Holocaust of the U.S. and, not incidentally, to align the United States with the research efforts going on in a dozen other countries.

    Let me at this point ask Mr. LaFalce if he has an opening statement.

    Mr. LAFALCE. Thank you very much, Mr. Chairman.

    In the two years since the United States again raised the issue of assets belonging to Holocaust victims and their heirs, considerable progress has been made toward finding and revealing the truth. Commissions to investigate the disposition of such assets have been established in Switzerland and other European countries; the State Department issued a preliminary report in May of 1997; class-action lawsuits have been filed; and framework agreements and negotiations between commercial banks and aggrieved parties have begun. Investigations have widened beyond individual bank accounts to include the role of central banks, pillaged gold, insurance companies, financial instruments and encompass the disposition of art works and jewelry. The information that has come to light is astounding. How the community of nations proceeds with this information will determine whether we truly seek the morally right path to correct past wrongs, or further deny harsh truths for financial gain.
 Page 5       PREV PAGE       TOP OF DOC

    The supplementary report, released Tuesday, June 2, paints a picture of complicity and denial, and highlights troubling activities spurred by commercial and financial motives. Too often, neutrality was apparently a shield for self-interest, at others'—both individuals' and nations'—expense. As England's Samuel Johnson so perceptively remarked, ''People are rarely so innocently engaged—and so committed to peace—as when they are buying and selling.''

    Sweden, Spain, Portugal and Turkey were indispensable in providing critical raw materials for the Nazi war machine. Sweden provided 90 to 100 percent of Germany's requirements for iron ore and ball bearings. Portugal and Spain together provided 100 percent of an essential mineral in processing tungsten for steel alloys. The earnings provided a gold reserve to Portugal that lasted through 1958. Turkey provided 100 percent of German requirements for chromite ore. Turkey's trade with the Allies and Axis raised its gold reserves to 216 tons, up from 27 tons. These countries profited handsomely not only from sales to Germany, from which they received gold, but from inflated sales to the Allies who were attempting to create shortages for the German war effort.

    Yet, history is rarely black and white. At the same time that neutrals were helping the Axis wartime effort, they also accepted thousands of Jewish refugees, and simultaneously helped the Allies through trade and use of territory—Berne as an Allied listening post and the Azores for refueling, and so forth. Most had territory and populations at risk to German invasion. Decisions by the neutrals were individualized and complex, based on their geography and their history. This is precisely the value of this supplementary report that we review today. It brings to light the concerns, the motivations, and differences among the neutral countries during World War II.
 Page 6       PREV PAGE       TOP OF DOC

    Mr. Chairman, I especially want to commend Under Secretary Eizenstat and his team for providing this very well-documented and very well-researched report to Congress. I look forward to the presentations and discussions during the course of this hearing. Thank you.

    Chairman LEACH. Thank you. Does anyone else wish to make an opening statement?

    Mr. BEREUTER. Mr. Chairman, I just want to congratulate and commend Under Secretary Eizenstat for the outstanding leadership and personal involvement he has had in the preparation of the report and the supplemental report. I think it is important basic research for our country and for the world. The acts of omissions and commission that took place there need to be brought to the attention of people in all countries.

    Mr. Chairman, I wish to associate myself with your remarks and those of Mr. LaFalce in your opening statements.

    Chairman LEACH. Mr. Vento.

    Mr. VENTO. Mr. Chairman, let me thank you for your efforts that you have made in terms of trying to keep our focus on this important topic and to commend Under Secretary Eizenstat. It is pretty clear that his deliberate and concentrated effort in this area has had a dramatic impact in terms of this issue and policy matter, not just for Congress but, I think, on a global basis in terms of trying to rectify and reconcile what have been some very, very serious matters and consequences for people emanating from the consequences of the 1930's and 1940's and the types of actions that took place by governments at that time.
 Page 7       PREV PAGE       TOP OF DOC

    It is not an easy task. It is one that, without the type of focus that he has been able to place on it, would not have gained its status. I think it points us in the direction, as I suggest, of reconciling these matters. I commend him. And for those of us that have known him over the years, this certainly is a credit to his work and substantial abilities.

    Thank you, Mr. Chairman.

    Chairman LEACH. Thank you, Mr. Vento.

    Mr. Lazio.

    Mr. LAZIO. Thank you, Mr. Chairman. I want to once again commend you for your early and sustained efforts on this issue.

    We have continued to receive reports about the aspects of the Nazi gold issue, and the reports provide significant new information, and they answer many long-standing questions, but they also raise new questions. They cast doubt upon what many of us have believed for decades to be established truths. In fact, they do more than cast doubt, they disprove statements and claims that were made following World War II, claims that are still wrongly defended today.

    Decades of relationships have been founded upon fraudulent statements. Following the war, we trusted the Swiss to be accurate about their involvement in laundering looted Nazi gold and other stolen assets. Swiss representations at the time were accepted and incorporated into the 1946 Washington Accord, which established guidelines for the Swiss and other neutral countries to pay back looted gold. These new reports make clear that most neutral countries abided by the spirit and the letter of this agreement but, unfortunately, not the Swiss.
 Page 8       PREV PAGE       TOP OF DOC

    The representations of the Swiss government at the time remind me of the holes in their famous Swiss cheese. Recent reports by the Bergier Commission and the U.S. State Department confirm that the Swiss knew they underestimated the amount of stolen assets that they received. These reports are re-examining and rewriting history.

    Unlike previous generations, many of today's world leaders have learned about the Holocaust as history, not as an unfolding human tragedy. This is true of many of us here in the U.S. Congress today. But we all know of George Santayana's famous quote: ''Those who cannot remember the past are condemned to repeat it.'' There is, of course, an unspoken prerequisite: ''The truth must be established and acknowledged before it can be remembered.''

    Here is my point. The issue of Swiss responsibility is about much more than justice for Holocaust victims, survivors and heirs. It is about preventing the recurrence of the barbarism of that era. I hope the commission we establish here today will hold the Swiss accountable for the deception that was given us five decades ago, a deception that has yet to be rectified.

    A long-dormant criminal case can be reopened when new evidence is discovered. A contract can be voided if it was based upon false claims and misrepresentations. And I believe we should reopen the 1946 Washington Accord, that we should use true figures of the assets that the Swiss wrongly accepted and that we should hold them responsible for the repayment of those assets.

    I yield back to the Chairman.
 Page 9       PREV PAGE       TOP OF DOC

    Chairman LEACH. Mr. Lucas, do you have an opening statement?

    Mr. LUCAS. No.

    Chairman LEACH. Mr. Fox.

    Mr. FOX. Thank you, Mr. Chairman. I thank Secretary Eizenstat for his leadership on this issue and for appearing before the committee today.

    Mr. Chairman, colleagues, and distinguished guests, this is certainly an important matter we are here to consider in this committee. The Holocaust and the impact it had on the Jewish people and others around the world has been dealt with extensively in other forums, yet despite the tremendous amount of time and energy that has been devoted to the study of this subject, the horrors of the Holocaust can never truly be understood and must never be repeated.

    I thank Chairman Leach for his leadership in bringing this bill forward and so the committee can deal with the disposal of the Nazi assets, especially those assets obtained from the victims of the Holocaust. I am looking forward to the passage of this bill so that a commission to examine issues pertaining to the disposition of Holocaust-era assets can be established and the President can make recommendations as appropriate. This bill will accomplish, to some extent, some closure and, hopefully, some justice.

    I thank the Chairman again for his assistance in this project and for the unanimous effort of the committee to support him.
 Page 10       PREV PAGE       TOP OF DOC

    Chairman LEACH. Thank you, John.

    Mrs. Maloney.

    Mrs. MALONEY. Mr. Chairman, first, I want to thank you and Ranking Member LaFalce for moving this issue forward.

    It is common for history to be rewritten again and again. Today, as disturbing new facts come to light, we are rewriting the history of World War II. Nations which have been hidden by the obscurity of neutrality during the 1940's have now been identified as an important source of financial assistance to the Nazi regime. More grimly, it has become all too clear that banks made profits off the property of untold Holocaust victims and later attempted to conceal their involvement.

    The U.S. Holocaust Assets Commission Act cannot undo the events of history, but it will help part of the world to take more responsibility for those events. H.R. 3662 will not only facilitate the restitution of property seized by the Nazis, perhaps even more importantly it will help make possible a better sense of closure for many victims of this century's darkest moment and their families.

    I would like to thank the leadership of this committee for holding these hearings. I know that our colleagues on both sides of the aisle will unite in support of this legislation. And on a personal note I would really like to applaud Under Secretary Stuart Eizenstat for his outstanding work in this area and in so many areas, and for the leadership of the Clinton Administration in moving forward with this information.
 Page 11       PREV PAGE       TOP OF DOC

    I would also like to note that one of my bills, the Nazi War Crimes Disclosure Act, attempts to declassify all of these papers so that the American public can study exactly what has taken place. Mr. Eizenstat has moved forward with declassification of material that has enabled this report, and I am hopeful that the CIA will approve the final bill, which they have been objecting to, so that we can move forward with total disclosure. As the KGB has done in Russia, we should so do here in the United States.

    In any event, you have done an outstanding job, Under Secretary Eizenstat. My constituents thank you.

    Chairman LEACH. Thank you.

    Mr. Manzullo.

    Mr. MANZULLO. Thank you very much, Mr. Chairman. I want to thank you for holding these interesting and informative series of hearings. I also want to thank Ambassador Eizenstat for the tremendous job he has done on this.

    One of the uses that I am going to make of the materials that we have been gathering here over the past several hearings is to try to compile these in a form and distribute them to the school children back in the congressional district that I represent. I think it is extremely important to fill in missing chapters of history during World War II and to tie together the entire picture as to what happened.

 Page 12       PREV PAGE       TOP OF DOC
    So, I again want to commend you for holding these hearings, commend the different panel members for the tremendous amount of work they put into it, and again commend Ambassador Eizenstat for his leadership in this area.

    Chairman LEACH. Mr. Foley.

    Mr. FOLEY. No, thank you, Mr. Chairman.

    Chairman LEACH. Well, with that, I think we will proceed, Stuart. And before beginning, I want to compete with my colleagues for a moment, and that is to suggest that you have not only done a wondrous public service in your efforts in this regard, but I personally consider you one of the finest public servants of the century.

    Mr. EIZENSTAT. Thank you very much, Mr. Chairman.

    Chairman LEACH. Did I compete adequately?

    Mr. LAFALCE. This century is only 98 years, and our country has been in existence a lot longer than that, Jim.


    Mr. EIZENSTAT. Thank you very much. I appreciate the remarks so many of you have made, and I would like to thank the committee for giving me the opportunity to discuss the subject which has captured the world's attention, due in significant measure to the pioneering work of this committee and to you, Mr. Chairman.
 Page 13       PREV PAGE       TOP OF DOC

    I want to single out the efforts and leadership of Chairman Leach and this entire committee, beginning with your first hearing in 1996. You have all been leaders from the outset in raising the consciousness of America and the world on the Holocaust asset issues. You have exhibited leadership in convening the very useful hearing last June in the wake of our preliminary report with historians from many of the affected countries to comment on our findings, and your efforts continued with last February's pathbreaking hearing which focused on art and insurance.

    Today's hearing, with the gathering of other distinguished panelists, is another example of this committee's work to ensure that this complex and emotional issue receives the proper attention and consideration by the Congress in an appropriately bipartisan fashion.

    This report, like our preliminary study, reflects a solemn commitment by this country to confront the largely hidden history of the Holocaust related assets after five decades of neglect. It is a historical review. It is not intended to accuse or indict any country or any institution. We are revealing facts. We hope they will lead other countries to examine their pasts, draw appropriate conclusions, and act accordingly, as indeed many of the countries mentioned in this report are now doing. The Swiss themselves have done an excellent job of showing the way for other neutrals.

    We have also been candid about our own role as a great country. Quite obviously, no country did more to defeat Nazi Germany, no country bled more, gave more in the way of resources than the United States, but it also has to be remembered that we remained neutral for 27 months after the outbreak of the war, until Pearl Harbor, although we provided critical lend-lease assistance to Britain in its lonely fight. Our own record in receiving refugees was, compared to those of neutrals who felt themselves under siege, worse perhaps than theirs.
 Page 14       PREV PAGE       TOP OF DOC

    I would like to acknowledge the tireless work and dedication of the State Department's Chief Historian, Dr. William Slany, and his staff and ask, Mr. Chairman and Members of the committee, that after my remarks he be permitted to join me for the question and answer period. I would also like to acknowledge my Senior Adviser Bennett Freeman and those people from the other agencies who participated in the preparation of the report.

    In our first report, our most significant findings focused on the financing of the war. They talked about the movement of looted gold from occupied countries and individual victims flowing through to Switzerland from Germany and used by Germany to pay for its wartime imports. We found that, in fact, the Swiss National Bank, the central bank of Switzerland, must have known that some portion of the gold it was receiving from the Reichsbank was looted from occupied countries.

    This is due to two things: first, public knowledge of the low level of the Reichsbank's gold reserves in the early years of the war; and, second, repeated and frequent warnings by the Allies during the war that the Swiss National Bank and other central banks of neutral countries were dealing in looted assets. There can now be no doubt of this conclusion.

    The Swiss commission, the Bergier Commission, a very courageous commission with a very courageous chairman, has just on May 25th come to its own conclusions which verify and underscore this fact. And if I may quote a key paragraph, ''The fact that the good faith exercised by the Swiss National Bank was an after-the-fact construct used to justify its own actions also becomes apparent when one considers how well the top management of the Swiss central bank was aware of the means used in the Third Reich to procure gold and that they were aware of this long before they began to pay for large shipments of gold from Berlin using Swiss francs.'' Still quoting. ''There is no longer any doubt the governing board of the national bank was informed at an early point in time that gold from the central bank of occupied nations was being held by the Reichsbank, and the Swiss National Bank was also aware of the other methods used by the Germans to confiscate gold from private individuals before and after the outbreak of the war.''
 Page 15       PREV PAGE       TOP OF DOC

    As Michael Fior shows in his study of this issue, and still quoting, ''The Swiss National Bank knew since the beginning of 1941 that the Reichsbank was in the possession of a substantial amount of illegally obtained gold.''

    Professor Bergier, in his Swiss commission, likewise found that, by mid-1942, the significance of gold in supplying the German wartime economy was known well beyond the narrow circle of political decisionmakers and the governing board of the Swiss National Bank. And this is a striking and, I think, courageous finding by the commission, and I would like to again quote it. ''Attentive citizens could read in the Swiss press exactly where the gold which the Reichsbank was circulating came from.''

    He then quotes a newspaper article in August of 1942 from one of the leading Swiss newspapers stating at that time: ''For those who want to know, there can be no more illusions concerning the real situation of gold trade with Germany.''

    We also found in our report last year that the gold received from the Swiss National Bank from the Reichsbank included some stolen not just from central banks of the countries the Germans overran but from Holocaust victims smelted into disguised gold bars, although there is no evidence that the Swiss National Bank knew this fact. These findings, again, were completely confirmed by the Bergier Commission.

    Our first report, then, focused on the financing of the war. Switzerland figured prominently because that was where most, although not all, of the looted gold went. This report focuses on a different element, and that is the equally important issue of the uses to which the looted gold was put, the ability of the Nazis to use the Swiss francs they obtained in exchange for the gold they looted to purchase critical war materials from the other neutral countries necessary to sustain the war effort, from Argentina and Portugal, from Spain, Sweden and Turkey.
 Page 16       PREV PAGE       TOP OF DOC

    By illuminating the trade as well as the financing side of the equation, our two reports together provide a seamless web, a comprehensive view, of the important part the wartime neutrals played in the structure of the German war economy. Argentina, as I will describe later, did not receive, to our knowledge, any direct looted gold.

    We have focused on these factors which shape their neutrality and their trading links with both the Axis and the Allies as well as on their handling of looted assets, especially gold. There are five new findings that we made in this report beyond those of last year's report.

    The first deals with the enormous contribution of European neutrals in supplying critical materials to the German war effort. Our report makes clear that, whatever their motivations, whatever the threats against them, and there were genuine threats, however acceptable by the standards of the time for neutrality, and, indeed, legally much of it was justifiable, the cumulative trade of the World War II European neutrals, in particular Spain, Portugal, Sweden and Turkey, helped to sustain the Nazi war effort by supplying key materials to Germany essential to its conduct of the war, in many cases well past the point, well past the point, where, from the Allied perspective at the time, there was a genuine threat of attack.

    I would like to refer you, please, to the first chart, which is described as Neutral Countries Supply of Germany's War Resources, on my far right. This chart estimates, and this, I think, has never been done before, what Germany's annual requirements were for three critical wartime commodities that the Allies felt were absolutely essential to sustain a German war effort: chromite, iron ore and wolfram. These were critical to the German war industry's manufacturers. Prewar stockpiles were used up in the early years of the war; and supplies from Spain, Portugal, Sweden and Turkey were, therefore, indispensable.
 Page 17       PREV PAGE       TOP OF DOC

    As this chart indicates, Turkey supplied chromite; indeed, in 1943, 100 percent of German needs; in 1944, between 50 and 65 percent of German needs. Albert Speer, Hitler's armaments minister, in a note to Hitler in November, 1943, said the following: ''Should supplies from Turkey be cut off, the stockpile of chromium is sufficient for only five to six months. The manufacture of planes, tanks, motor vehicles, tank shells, U-boats, almost the entire gamut of artillery would have to cease from one to three months after this deadline, since by then the reserves in the distribution channels would be used up.''

    The second is Spain and Portugal. And if you will look on the chart, you will see at the bottom wolfram, from which tungsten was derived, which was used in hardening steel to make machine tools, filaments and armor. The chromite from Turkey was used for hardening steel to make armor. And this chart shows that in 1942 and 1943 Spain and Portugal supplied essentially 100 percent of German annual requirements, and as late as 1944, 50 percent.

    Prime Minister Salazar, the Prime Minister of Portugal during the war, acknowledged in early 1944 that denying wolfram to Germany, and I quote Salazar, ''would reduce her power of endurance and the war would be accordingly shortened.''

    Sweden's role is also important to focus on as a supplier of iron ore in 1942 between 45 and 90 percent of German needs; in 1943 between 50 and 100 percent; as late as 1944 between 35 and 70 percent. And Sweden also provided ball bearings. This iron ore was essential. It was very high grade. It was essential to the making of steel, without which, again, the German war effort would have had great difficulty compensating.

 Page 18       PREV PAGE       TOP OF DOC
    The supply of ball bearings, much of which was manufactured in Germany but some being imported from Sweden, was seen by Allied leaders as so critical that a campaign of terribly dangerous air raids was launched against Germany in the summer of 1943. Over cities like Schweinfurt, many planes and crews were lost in a vain effort to cripple Germany. All the Allies could do about Swedish supplies of ball bearings to Germany was to pursue well into 1944 their demands that these exports be decreased or be ended.

    Implicitly or explicitly, the neutrals resisted Allied economic diplomacy and expressed fear of German reprisals if their economic relations were curtailed. This invocation of the doctrine of ''force majeure,'' or superior force, by the neutrals could not be easily countered by the Allies in the early years of the war because, indeed, there was a legitimate concern about invasion.

    But the invincibility of the German war machine was belied during 1943 with a series of major defeats that foreshadowed Allied victory. The neutral nations recognized the turn of the tide and the receding danger of German attack or reprisal and began, at Allied demand, to curtail trade and other measures supporting the German war effort. By late 1943, the Allies were less willing to accept neutral claims of the threat of force majeure as a reason to justify their continued economic interaction with the Nazi regime.

    This second chart, which we call the Time Line, but is our sort of ''force majeure'' chart, is perhaps the best summary chart that we have done in our two studies. It summarizes the status of the neutrals, their major exports to Germany and other contributions, their contributions to the Allies; and then, in the middle columns, we spent a great deal of time on this, checked with military historians and others, and you will see that the column ''Diminution of German Military Threat'', then the next, ''Initial Significant Concession to Allied Demands'', and then, after that, ''When Ceased Exports to Germany.''
 Page 19       PREV PAGE       TOP OF DOC

    Now, the chart and column indicating ''Diminution of German Military Threat'' is what Allied military planners believed at the time to be a point at which the threat of invasion from Germany had significantly diminished. That, obviously, doesn't mean psychologically that the countries felt the threat had done, but the Allies did.

    And so we tried to use a more objective measure, which is the next column. And you will see a number of specific measures that were taken there that would indicate concretely that the neutrals must have felt that the threat was diminished or they would not have done them. For example, the Azores access agreement given to the UK by Portugal; the fact that Franco withdrew the Blue Division, and others.

    And yet, the neutrals continued for many months, while they were at the same time rescuing and aiding Jewish refugees, to continue shipping critical materials well into 1944 and, in Switzerland's case, in terms of using Nazi gold, which again the Swiss bank knew was looted, until the closing days of the war—not the closing years of the war, the closing days of the war.

    Indeed, there was an Allied mission between January and March of 1945—the war ended in May of 1945—called the ''Curry Mission,'' in which the Swiss National Bank agreed to stop trading in looted gold. Mr. Pohl, from the Reichsbank, came two weeks later; and the bank abrogated its agreement and continued until the very last days of the war to trade in this looted gold.

    A second set of findings deals with the complexity of neutrality; and given the experts that you have on the next panel, Mr. Chairman and Members of the committee, this is a particularly fascinating issue. Because the report sheds light on the complexities of neutrality, the different forms neutrality took in different countries for different reasons, in a more sophisticated way than we did in our first report, and in ways that should dispel any monolithic concept of neutrality during World War II. The wartime neutrals often faced similar pressures and counterpressures but reacted in varying ways, reflecting their specific wartime circumstances, the attitude of their leaders, and the enduring features of their geography.
 Page 20       PREV PAGE       TOP OF DOC

    I would like, if I may, just to go back for one moment to that second chart, because you will see the column Contributions to Allies. It can be a little bit misleading, because it is true that the Allies purchased wolfram, for example, from Portugal, as did Germany. But most of the Allied purchases were what we call ''preemptive purchases''. They were done not because the Allies needed those materials—they did need them, but they got them from other countries—but to preempt Germany from getting even more.

    There was no such thing as a uniform or absolute neutrality during World War II. The ideological leanings of the Franco regime in Spain, for example, were clear and unmistakable. Franco's dispatch of the Blue Division to join the Wehrmacht at the Russian front was a most unneutral act, even by strict legal interpretation, and underscored his pro-Axis tilt. So, too, leading members of the Argentine military regime were also openly sympathetic to the Axis.

    Sweden's permission for German troops to regularly transit its territories, as you mentioned, Mr. Chairman, in your opening statement, 250,000 separate trips by German troops rotating to and from the war front, and the protection by the Swedish navy of German shipping in the Baltics were also hardly neutral.

    Neither, on the other side, although a happy event, was Portugal's granting access to the British in the Azores for bases, which was a very welcome and important contribution to the Allied effort. Turkey was the only neutral accepting arms from both the Axis and the Allies.

 Page 21       PREV PAGE       TOP OF DOC
    Different factors shaped the neutrality of Argentina, Portugal, Spain, Sweden, Switzerland, and Turkey, ranging from long-standing, centuries-old policies of avoiding entanglements in European wars in Switzerland's and Sweden's cases, to the fear of invasion and the desire simply to reap economic rewards. These interests, in turn, produced decisions and actions which were at various times both consistent and inconsistent with the countries' claims of neutrality, at times helpful to Germany, at times helpful to the Allies. These decisions and actions were often based on their own strictly legal interpretations of what was permissible under existing international law, as distinct from moral considerations of what was right and wrong.

    Now, Members of the committee and Mr. Chairman, it is important, I think, that we try to put ourselves in the position of those neutrals at the time. We recognize that neutrality was an accepted legal standard at the time. Standards of morality have evolved in a positive way since the war because of the devastation of the war, because of the Holocaust itself, because of the Nuremberg trials, because of the U.N. Declaration of Human Rights, and now we have a higher plane than perhaps they did at the time of World War II. These seemingly inconsistent decisions and actions coexisted and contributed to the complex phenomenon of neutrality during World War II, a war different from all previous and subsequent wars because of the unprecedented scope of the assault on human values.

    With your next panel, Mr. Chairman, perhaps these kinds of questions might be addressed to all the nations involved in the war, including the wartime neutrals, questions which can help all of us, including the neutrals, come to terms with the role they played during the war. Questions like the following:

    At what point during World War II did it become evident that Nazi aggression was not just another war in an endless series of European wars but was qualitatively different in its brutal treatment of civilians and its threat to human values?
 Page 22       PREV PAGE       TOP OF DOC

    At what point did the threat of Nazi invasion recede sufficiently so that, with little risk, trade with Germany in critical commodities could have been sharply curtailed or stopped with the consequent saving of thousands, tens of thousands, hundreds of thousands of lives of our soldiers and of innocent civilians?

    If neutrality was defended during the war as a way of self-defense, then why was there so little cooperation with the Allies after the war in returning looted assets which had come into their possession or in liquidating German assets for the benefit of stateless refugees and the reconstruction of war-torn Europe at a time when the United States was spending in the Marshall Plan billions of dollars to reconstruct Europe?

    These are difficult questions to which there are no easy or certain answers, with or without the benefit of hindsight, but they are questions which need to be answered.

    There appears to have been a clear preponderance of sympathy for the Allied cause among the public in several of these countries and significant elements of sympathy in the others. Again, consistent with this mixed pattern of actions was the refuge offered by the neutral nations to more than 250,000 Jews fleeing the Holocaust. Acts of humanity and even heroism rose above the harshness or insensitivity of wartime refugee policies and reflected well in this respect on their governments and peoples.

    For example, 100,000 or so refugees, mostly Jews, fled through or into the Iberian Peninsula. Spain allowed 20,000 to 30,000 refugees to cross the French border into Spain after the fall of France until the summer of 1942 and then another 7,500 by the end of 1944. The Portuguese government allowed Jewish organizations to relocate from occupied Europe to Lisbon during the war. During 1941 and 1942, the Portuguese government allowed 5,000 refugees to pass through Portugal to the United States.
 Page 23       PREV PAGE       TOP OF DOC

    The Swedish government is perhaps the best example of this bifurcated, almost schizophrenic notion of neutrality that took positive and negative aspects. At the same time as it was ferrying German shipping and allowing German troops and supplying critical materials, it was also taking in 7,000 Danish Jews in the famous boatlift.

    Perhaps one example can bring this complexity to mind, and that is the Wallenberg family itself, as you mentioned, Mr. Chairman. Sweden's protection, spearheaded by the heroic actions of Raoul Wallenberg, was extended to some 30,000 Jews who faced extermination in the last phases of the Holocaust in Hungary. And yet, at the same time, another branch of the very same family was serving as a cloaking agent for German-owned businesses and helped to support the German war effort.

    Turkey, which had protected Jews since their expulsion from Spain in 1492, while accepting arms from both the Axis and Allies allowed some 100,000 Jewish refugees to pass through its borders during the war. And even Argentina, with its clear pro-Axis leanings, accepted between 25,000 and 45,000 Jewish refugees before and during the war, more than any other country in the Western Hemisphere.

    Switzerland admitted over 50,000 Jewish refugees from 1933 until the end of the war, of whom 30,000 remained and survived safely in Switzerland during the war. In this respect, the U.S. record pales by comparison and with less justification. The U.S. accepted a total of 21,000 refugees during the war because of the quotas that were never changed.

    A third major finding and new finding involved new determinations about the Nazi gold issue itself. We arrived at new figures of looted gold relying in part on, again, the path-breaking work of the Bergier Commission.
 Page 24       PREV PAGE       TOP OF DOC

    Our first report estimated that Switzerland received, through the Swiss National Bank, as much as $414 million, or about $3.6 billion in today's values, in both looted and nonlooted gold from Nazi Germany, of which we estimated about $185 to $289 million was looted. You can multiply all these figures by a factor of about nine to get today's values.

    These figures were increased by the recently released Bergier Commission report, which estimated that $440 million in total gold went through Switzerland, of which $316 million, or about $2.7 billion, was looted, well above our own estimates. And they now give us, therefore, a higher and more definitive range on the total of looted and nonlooted gold that flowed through Switzerland.

    A second new gold finding was presented in a separate annex attached to this report by the U.S. Justice Department's Office of Special Investigations, and here they did some really pioneering research. New sources came to light, really just within the last few months before our report, that provide additional information about the infamous Melmer account at the Reichsbank, in which the SS deposited the gold and other valuables it had looted from individual citizens and from its victims at killing centers and concentration camps. These sources provide the most detailed data currently available for the value of the gold in the Melmer account and yield an estimate about twice our previous estimate and twice the Bergier Commission report.

    These new figures are based in part on our assessment of the records of the DeGussa Company in Germany, which opened their books to us, which was the smelter for the Reichsbank in taking victim gold and smelting it down into disguised gold bars, as well as newly found Reichsbank microfilm found in private hands in Vienna.
 Page 25       PREV PAGE       TOP OF DOC

    Of particular importance in these microfilms are fresh analyses we can do of the postwar study, done by Albert Thoms, the first postwar head of the Bundesbank. His study lists in gruesome detail the 29 columns of looted victims assets under headings such as gold bars, gold and silver coins, purses, knives, forks, jewels, gold and diamond rings, watches, dental gold, broken gold, and so forth.

    The Justice Department's historians then made the conservative estimate that the gold that had been in the Melmer account was worth about $4.65 million, or around $40 million today, and this is clearly on the low side because it doesn't include the $3.9 million in gold bullion and coins forwarded to the Reichsbank as a result of Operation Reinhard, the Nazi program to exterminate Jews in Eastern Poland, nor the gold taken from victims before they were sent to concentration camps nor the forced sales of gold to the Berlin municipal pawnshop.

    A third new finding in the gold area reveals that nearly $1 million in victim gold was taken from the Melmer account and included in the gold that the Dresdner and Deutsche Banks, both German private banks, sold on the Turkish free market as part of a scheme to supply the Reichsbank with foreign currency and to help Axis diplomats and agents finance their operation in Turkey.

    A fourth new finding in the gold area was more than $300 million, or $2.6 billion in today's values, in Nazi gold reached Portugal, Spain, Sweden, and Turkey during the war, three-quarters of which was transferred through the Swiss National Bank.

    This flow of gold, it is important to emphasize, continued despite Allied warnings in January of 1943 and February of 1944 against accepting transfers of assets that had been looted. The European neutral banks continued to accept looted gold from the Reichsbank even after 1942, when it was clear the Reichsbank had long since exhausted its own prewar gold reserve and was using the reserves of the looted central banks of the countries they had overrun.
 Page 26       PREV PAGE       TOP OF DOC

    The fourth general set of findings concerns the postwar negotiations; and I am told we have in the audience here one of the people who I think deserves great commendation, Mr. Sy Rubin, who was head of the negotiating team for many of the negotiations carried out by the United States with the neutrals.

    This next set of findings involves the postwar negotiations that the Allies conducted with the wartime neutrals. They were protracted, they were contentious, they failed often to meet their original full goals: the restitution of looted gold and the liquidation of German external assets to fund the reconstruction of postwar-occupied Europe, to satisfy the claims of countries whose gold was stolen so that it could flow through the Tripartite Gold Commission to be returned, and to provide relief for refugees.

    Here, I would like to just mention our last chart. This chart provides a Summary of the Assets in Monetary Gold—it is on my left, the one closest to you—obtained by each of the neutrals during the war; how much external German assets were accumulated, generally real property, in these various neutrals; how little was returned to the Allies; and how little in liquidated assets were turned over to the Inter Allied Reparation Agency.

    Of the more than $300 million worth of gold traded to the neutrals other than Switzerland, of which $240 million we estimate was looted, only $18.5 million was eventually returned to the Tripartite Gold Commission as a result of the protracted Allied negotiations. Most of this came from Sweden, and the turnover of even this small amount was delayed until 1955. Portugal's $4.5 million did not reach the Tripartite Gold Commission until 1959.

 Page 27       PREV PAGE       TOP OF DOC
    Of the almost $500 million in German external assets in Argentina, Portugal, Spain, Sweden and Turkey, the long post-war negotiations resulted in turning over for the recovery of Europe only about $100 million, two-thirds of which have came from Sweden.

    Why did we fail to recover so much of the gold and assets in negotiations that stretched out to 1958? The answer is complex. It includes the intransigence of the neutrals in yielding up what they had received during the war, conflicts between the State and Treasury Departments in Washington and between the U.S. and other Allies who were less forceful than the United States in pushing the neutrals; but, perhaps above all, the great preoccupation of policymakers after the war with the threat of Communist subversion and aggression aimed at the very nations we wanted to incorporate into our alliance.

    It was also an unfortunate Allied interpretation of the Bretton Woods Resolution, and that was that only countries directly purchasing looted gold from the Reichsbank would be responsible for its return, even if they knew it was looted. It was an interpretation which wartime Secretary Morgenthau would have been shocked by. This allowed the U.S. to accept its gold as collateral for U.S. bank loans to Spain.

    Our last set of findings involved Ustasha gold. As we went through the hundreds of thousands and, indeed, millions of pages of documents, we came across documents bearing on Ustasha gold; and it raises aspects of the Vatican's record during and immediately after the war, to which answers may exist only in their archives.

    The Ustasha regime, Mr. Chairman and Members of the committee, was wartime Nazi Germany's puppet state in Croatia, which systematically and mercilessly robbed, murdered and deported Serbian Sinti-Romany—Gypsy—and Jewish populations. Gold and other valuables of the victims became a part of their treasury, which may have been as much as $80 million. Portions of this appear to have been transferred to Switzerland in the last year of the war. Little was accounted of this in postwar negotiations made by Yugoslavia with the Allies and Switzerland.
 Page 28       PREV PAGE       TOP OF DOC

    With the defeat in 1945 of Hitler and his satellites, including Croatia, the leaders of the Ustasha regime fled to Italy, where they found sanctuary at the pontifical College of San Girolamo in Rome, headed by Father Dragonovic. This college was most likely funded, at least in part, by the remnants of the Ustasha treasury. It may have operated with at least a tacit acquiescence of some Vatican officials, though we have no evidence it had the acquiescence of any senior officials or of the Pope.

    This college helped fugitive Croatian war criminals, including the notorious leader of the Ustasha, Ante Pavelic, escape to South America in the early postwar years. This pontifical college also cooperated with the so-called ''rat line'' used by the U. S. Army Counter Intelligence Corps after the war to assist the escape from Europe of anti-Communists, including the Nazi war criminal Klaus Barbie to South America. Nothing better shows how U.S. policy so dramatically changed from the focus on war-related issues to the cold war against the Soviet Union.

    The record of the terrible legacy of Ustasha assembled for our study is incomplete. A full accounting should be made now to achieve a full understanding of these issues. The opening of relevant archives in Croatia, Serbia and the Vatican would be an essential part of this effort. Pope John Paul II is one of the preeminent moral leaders of this or any century. His efforts to reconcile the Catholic church and Jewish communities are inspiring and commendable. Opening up these archives would be consistent with the leadership he has provided.

    Let me conclude by what remains to be done. Our conclusions are largely based on our own records. Therefore, it is important that other countries follow their own records. In this respect, we are very pleased that the United Kingdom—which in some respects began this—the U.S. and Switzerland have led the way. But now Argentina, Portugal, Spain, Sweden, Turkey, Croatia, Belgium, Brazil, Canada, France, the Netherlands, Norway, and just last month Estonia, Latvia and Lithuania have all established their own historical commissions. This, it seems to me, is a very positive result.
 Page 29       PREV PAGE       TOP OF DOC

    And if I may say so, Mr. Chairman, it is not our work alone. It would not have happened without this committee's work. Absolutely would not have happened. And you should be very proud of that.

    We are also trying to convert history into justice to help countries come to terms with their past and to galvanize an effort for Holocaust victims, survivors and education. Under your leadership, Mr. Chairman, you have introduced and been the principal sponsor of H.R. 3662 that would establish a U.S. Holocaust Assets Historical Commission, the counterpart of which was introduced in the Senate by Senator Al D'Amato, whose leadership, we all know also, has played an enormous role in this whole enterprise. We urge this committee and the House to act as soon as possible on this legislation, which has the strong support of the President. It was introduced in Congress on April 1 to create a Presidential commission to examine the fate of Holocaust assets in the U.S. with bipartisan support and our strong backing.

    The substantive mandate of the commission would focus on two key issues: first, to conduct original research on the collection and disposition of Holocaust-era assets that came into the control of the U.S. Government after Hitler came to power in 1933; and, second, to review research being conducted more broadly in the public and private sectors. The commission would be charged with making recommendations no later than December 31, 1999. Establishing a strong commission that can meet its mandate by this deadline would send a message that the U.S. is determined to address the fate of assets here at home.

    Mr. Chairman, we will also maintain our historical research efforts in other ways. To build on the landmark London-Nazi gold conference of last December and to continue the search for truth, the Department of State and the U.S. Holocaust Museum will co-host, from November 30th to December 3rd, the Washington Conference on Holocaust Era Assets. The objective will be to review our progress on the gold issue, to renew the drive to open archives, and to share research on other assets, especially artwork and insurance.
 Page 30       PREV PAGE       TOP OF DOC

    As in London, this will not be a forum for government decisionmaking, but we plan to use the conference in our preparations to work with a wide range of governments and NGOs to shape a nonbinding international consensus on principles and processes to redress injustices in these categories of assets. We hope that this consensus will give new impetus to the encouraging initiatives already undertaken in other countries and that this intergovernmental forum can be a catalyst for many other related efforts to address this great unfinished business of the 20th century.

    In conclusion, Mr. Chairman, your personal leadership and that of your committee has played an important role in encouraging the international community to make significant progress in exploring issues of the Holocaust-era assets. These hearings which you have done have been landmark hearings. Your examination of the complicated issues of the era is a difficult undertaking. While our research and international conferences have provided a framework for achieving a greater understanding of the fate of these assets, they have led to a vast public political impact beyond the academic and diplomatic arenas and have commanded the attention of the world and touched the consciousness of humanity.

    You, Mr. Chairman, and every Member of this committee has been an essential part of this historic effort. We thank you for your consideration.

    I am sorry again for the length of this presentation, but I thought it important to get it all out and, again, with your permission, would like Dr. Slany to join me and would commend him for his efforts.

 Page 31       PREV PAGE       TOP OF DOC
    Chairman LEACH. Well, thank you, Secretary Eizenstat, and the committee has normal rules that relate to length of testimony, but this testimony was compelling and appropriately lengthy.

    Dr. Slany, would you join the table as well?

    And let me just comment, because few people know that some of our great institutions of government have resident historians as public officials, and this is a very appropriate role, in my view, for the United States Government. We are particularly appreciative of the work the Department of State historians, with historians from other departments, have put in, and we are appreciative of your efforts, Dr. Slany.

    Dr. SLANY. Thank you, Mr. Chairman.

    Chairman LEACH. Mr. Bereuter.

    Mr. BEREUTER. Thank you very much, Mr. Chairman; and Mr. Under Secretary, again thank you for your work and for your testimony today and to all those people who helped you.

    I have a couple of very specific questions.

    The Spanish government has already rejected the allegations that it had been paid for supplying war materials to Nazi Germany with gold plundered from Jews during the war. What is your view on that controversy?
 Page 32       PREV PAGE       TOP OF DOC

    Mr. EIZENSTAT. First of all, we are going to be working with the Spanish government. Dr. Slany will be meeting with his counterpart to try to reconcile our findings with theirs.

    We believe that our findings are quite clear. We presented an analysis that made clear that evidence is overwhelming and substantiated by the Bergier report that from 1942 all of the gold traded by Germany was looted. Exports by Spain as well as by Portugal, Turkey and Sweden from 1942 forwards, therefore, must have been largely paid for with looted gold, either sold to the Swiss National Bank or transferred directly overland to Spain or through Germany's account in a Swiss National Bank.

    Our report presents evidence from U.S. records that identify 37 tons of gold coming from the Swiss National Bank to Spain. This coincides with the 38.6 tons reported by the Bergier Commission as going to Spain and the 38 tons reported in the Spanish Commission report itself.

    Differences between our estimates and Spanish and Swiss accounts arise from the number of tons reaching Spain from Germany directly and not through the Swiss National Bank. Our estimate, made in 1946 on the basis of Spain's own official record, estimated that up to 85 tons reached Spain directly from Germany or from the German account to the Swiss National Bank. The Spanish Commission's figures are lower, but this again depends on the fact that they only looked at the Spanish equivalent of their national bank, whereas we looked at an institution called SOFINDUS, which was a major recipient in Spain of looted gold.

 Page 33       PREV PAGE       TOP OF DOC
    We again think that it is important that we get together with Spain. We appreciate the fact that they have done some very thorough research, and we believe that we can reconcile our differences through meetings with Dr. Slany and the Spanish historians.

    Bill, you might want to reference this as well.

    Dr. SLANY. We already had some discussions with the members of the Spanish Historical Commission; and it is clear that the differences between the methodology that we used in our report, which was based exclusively upon U.S. official records, and the methodology used by the Spanish Commission do leave an area in between that could best be dealt with by our proposal to have a joint publication, a paper or an article, which would make more clear why there are differences and how those differences can be explained.

    Mr. BEREUTER. Thank you very much.

    With regard to the legislation now pending, 3662, and the deadline, is the December 31, 1999, deadline for information sufficient to produce a copy of a report? Your opinion on that.

    Mr. EIZENSTAT. I believe that it is. And we chose this date because we have asked all the other historical commissions, some 16 now, to try to finish their work by the end of this century with the notion that we ought to close the books on this millennium with the full knowledge of these facts and go into the next millennium a little bit wiser and with a little more sensitivity.

 Page 34       PREV PAGE       TOP OF DOC
    Mr. BEREUTER. If I could work in one more question, I was particularly interested in the element on Ustasha gold because it seems to me in some ways it represents an unresolved conflict between Croatians and Serbs, and in some ways contributed to the disintegration of Yugoslavia and today the difficulties in Bosnia. You indicate that there is a terrible legacy yet to be recorded, the research there is incomplete; and you made reference to and commended the Pontiff about the role that he could play and the Vatican could play.

    But at this point is there any indication that Croatia and Serbia are willing to open their archives, to shed more light on this question raised in your report? And whether or not you say yes or no on that, what do you think our role in the United States Government might be to pursue this issue?

    Mr. EIZENSTAT. Well, first in terms of Croatia and Serbia, Croatia has indicated a willingness to do so. They have established recently their own historical commission, and we hope that that commission will have full access to the archives. But we have reason to believe that is the case. We have not yet been able to get that same assurance from Serbia.

    With respect to the Vatican, we have asked on several occasions that their archives be opened. We have yet to get a positive response. I want to make clear that there is no evidence we found that the Vatican or Vatican officials knew about or assisted the efforts of this pontifical college, but nonetheless, we believe that the Vatican archives could shed light on these important events and we do hope the Vatican will make its archives accessible.

    Mr. BEREUTER. Thank you very much.
 Page 35       PREV PAGE       TOP OF DOC

    I would like to pursue additional things we can do to try to resolve the uncertainty of what happened between Croatians and Serbs in that war.

    Thank you Mr. Chairman.

    Chairman LEACH. Thank you Mr. Bereuter.

    Mrs. Maloney.

    Mrs. MALONEY. No questions.

    Chairman LEACH. Mr. Royce.

    Mr. ROYCE. Thank you Mr. Chairman. It is my understanding that, as far as our policy, we are planning to disburse Tripartite Commission gold through the Nazi Persecutee Relief Fund, Mr. Eizenstat, even though there are victims of Nazi looting who believe that their own seized assets are part of the Tripartite Commission holdings. Meanwhile, the last time I checked, the British and French are blocking attempts to declassify the Tripartite Commission records, and those are the very records that would show or would prove that those individual gold bars came from those individual families. My question concerns the ownership of this gold and its documentation.

    First, what is the reasoning behind disbursing this gold through the fund when some of it might be individual property? Is our position that none of this gold is individually owned?
 Page 36       PREV PAGE       TOP OF DOC

    And, second, what is the nature of the classified Tripartite Commission documents? Might they reveal individual ownership of the gold? And when will these records be declassified? I know the British say they do not want to do it. Why can't we insist? We are part of this process. Why can't we insist?

    Mr. EIZENSTAT. Thank you very much. We have insisted, and it is our belief that by the end of this summer and certainly by the fall, these records will be fully declassified and the Tripartite Gold Commission's work, after 50 years, will be complete. Your question is quite pertinent, and we have been assisting and we think that we will be successful in getting these records declassified.

    Second, on the question of the Tripartite Gold Commission Fund itself and victims and their individual property, it was based on our report last year that we found the ability to actually trace some of the gold that the allies collected after the war and put into the Tripartite Gold Commission, the 337 tons, that some portion of it, we have no way of estimating how much, we think a fairly small amount, but certainly some was victim gold that had been smelted down by the Degussa company or by the Prussian Mint and given disguised markings to make it look like Central Bank gold.

    It was on that basis, Congressman Royce, that we went to the British and French, our co-trustees, and on a parallel track, we asked some dozen countries who had claims on that remaining gold—there is now about 6 tons of gold that has never been distributed, worth about $60 million—instead of taking it, to put it into a Nazi Persecutee Relief Fund for individual victims.
 Page 37       PREV PAGE       TOP OF DOC

    Now it is just virtually, I would say take the ''virtually'' out, I cannot conceive that one would actually line up individual victims with individual amounts. But we are putting it into a relief fund for victims and survivors on the recognition that at least some of that gold was victim gold.

    Ninety-eight point five percent of all the gold that was collected by the Allies, the 337 tons, has been distributed back to the central banks of the dozen countries or so from whom it were looted. They got back about 65 percent of the total value. And what we have said to these countries is, given that, why don't you as a moral gesture not take your last tranche?

    We are very pleased that a number of countries have already agreed who have claims on the gold. The Austrians about $10 million in gold they will put in. The Dutch, the Greeks. We believe the Italians will. We hope, although we do not yet have a definitive word from the French, but we are hopeful there. But interestingly, even those who do not have claims on the gold are making contributions. The Argentines have pledged to make a contribution. Spain and the U.S., $25 million.

    Mr. ROYCE. Before my time runs out, Secretary Eizenstat, let me ask you also, you previously communicated with the U.S. Embassy in Prague and you said you are working with the Czech financial ministry to facilitate the processing of restitution claims by U.S. citizens. This is being done under the 1994 amendment to the Czech restitution law.

    How is this effort going? Will you be able to report on the Czech Government's current handling of restitution claims by Americans?
 Page 38       PREV PAGE       TOP OF DOC

    Mr. EIZENSTAT. I will give you more detail on that, but a brief summary is that it is mixed. In terms of communally owned property, there has been a return of a significant amount of property. But much of the property that is in the control of state and local authorities in the Czech Republic has not been returned.

    With respect to personal property, we have gotten many letters from Czech Americans; and I have to say that I am disappointed because there are citizenship and residency requirements in the Czech Republic that would make it virtually impossible for Americans of Czech origin to recover back their personal property. This is something we continue to work on but we have not on the personal side made any breakthroughs yet.

    Mr. ROYCE. I thank you. I had the chance to hear you speak the other day on CNN on the need to come to terms with one of the most atrocious and uncomfortable episodes of the 20th century before we enter the 21st century, and you are right. I commend you with your work, and I wish you success as you continue to try to resolve some of these still ongoing problems.

    Thank you, Mr. Chairman.

    Chairman LEACH. Well, thank you, Mr. Royce.

    Mrs. Maloney.

    Mrs. MALONEY. Deputy Under Secretary, I would really like to just ask you about your access to the information that allowed you to come forward with this report. Much of the information that you reviewed was classified; am I not correct?
 Page 39       PREV PAGE       TOP OF DOC

    Mr. EIZENSTAT. That is correct. And for the first time in this report we also had access to intercepts from the CIA of German and other neutral communications during the war, and that facilitated our work. Likewise, the access to this recently found microfilm of the Reichsbank and the Thoms report was very helpful and the Degussa records in Germany.

    But having said that, still, almost all of our report is based on our own archival records and our intercepts of other communications. That is why, to get a complete picture of this, these 16 other commissions need to do their own work looking at their own archives. One of the things we hope to accomplish at the Washington conference in November-December is an agreement by every country there to open its archives completely and fully.

    Mrs. MALONEY. Well, I congratulate you on your work and for taking the next step, which is going to be this international conference that you will hosting.

    Could you tell us more about it? Where will it be held? Who will be convening it? Is it just America, or are there a number of countries convening it?

    Mr. EIZENSTAT. There were 42 countries at the London Gold Conference. It was the first time that the former Axis, former Allies, former neutral countries were all in one room talking about this topic. We will invite all of those countries. We hope all of them will come.

 Page 40       PREV PAGE       TOP OF DOC
    The subject matter will be completing the record on gold, looking at art and insurance and other assets, and trying to come to a more complete picture of how other assets were taken as well. The art and insurance issues are very controversial and very difficult, and we hope in the art area to even be able to establish some nonbinding guidelines.

    You may be familiar with this case in New York where two Austrian paintings, the Schiele paintings, were taken by the prosecutor when they were being shown at the Museum of Modern Art. So we want to try to establish some guidelines, nonbinding though they will be.

    Mrs. MALONEY. Again, I congratulate you. I would also like to mention that a number of constituents have contacted my office of course all applauding your work, but many trying to achieve access to the same documentation that you were able to have access to because they are scholars, they are writing books, or whatever.

    Mr. EIZENSTAT. I would like to respond to that.

    Mrs. MALONEY. I have to say this. George Santayana, the philosopher, has said that ''Those who do not study the past are condemned to repeat it.'' I just would like to ask the question, do you think that these archives should be open to scholars, to the public, to study as your commission and your office has been able to do?

    Mr. EIZENSTAT. Yes. I would like Dr. Slany to answer this more fully. But Mr. Bradsher of the National Archives has really done truly heroic work in opening and indexing and cataloguing out of Suitland, Maryland, all of this information. This is the information we have relied upon. We declassified about 800,000 pages of documents and have been putting them in the Archives.
 Page 41       PREV PAGE       TOP OF DOC

    Dr. Slany, you, from an historian's standpoint, may want to talk about this and the efforts you made in London to try to get other archives similarly declassified.

    Dr. SLANY. Yes. The National Archives has here in Washington made available now, on an expedited basis, the records which we have been able to identify. And as Ambassador Eizenstat has mentioned, there is a finding aid which is ever-expanding because we keep finding more records. This finding aid is available on the web electronically, on the Holocaust Memorial Museum's web site, and it allows scholars to have the same kind of understanding and access to the records that we in the government agencies were able to use.

    But it is important to widen the body of information on which research is conducted; and, for that reason, we are aiming at expanding access on the web site at the Holocaust Memorial Museum through the identification of documents in the British Archives, French Archives, German Archives, and so forth. It is only on the basis of a correlated examination of all these records that a real full historical understanding will be obtained, and that is a step that we have not yet completed.

    Mrs. MALONEY. Well, my time is up. I congratulate you. Just very briefly, were there some documents that were not being declassified at this point on which you relied in coming forward with this study?

    Dr. SLANY. The answer to that is that everything that we have examined and used in this report is declassified, and then some. Our major problem as historians is that we may not have examined everything that in fact is available.
 Page 42       PREV PAGE       TOP OF DOC

    There are, as Ambassador Eizenstat has mentioned, the ''Magic'' intercepts, and it is a lifetime experience to try to examine all of those and determine what President Roosevelt and others knew during the war about what was happening in the Axis countries.

    Mrs. MALONEY. Thank you very much.

    Chairman LEACH. Thank you very much.

    Mr. Manzullo.

    Mr. MANZULLO. Thank you very much. I had a couple questions. One is a functional question, and the other one has to deal with the intent of H.R. 3662.

    How have you been physically able, doctor, to manage the amount and mass of materials in this investigation and bring them together? As a student of history, I am very much intrigued on how you were able to do that.

    Dr. SLANY. I would not want to leave you with the impression that we are alone in having undertaken this. There have been other historical works done, especially in the last five or ten years, using some of these materials. There are historians of eminence in many countries who have been examining some of this.

    I think what we did in our project was to try to overcome the amnesia of many people who were leaving this work to be done only by historians, and what our report was aimed at was trying to find a wider audience. A regrettable thing as a historian is that we have not examined everything. We have tried to provide, in effect, a road map through the materials that we already know about. But without saying definitively that we have turned every page—and we leave it to our historian colleagues in this country and others to be able to make a still more complete record, an international record, an international accounting—that is how we have left it.
 Page 43       PREV PAGE       TOP OF DOC

    Mr. MANZULLO. Thank you.

    Mr. Secretary, with regard to the bill that we will be marking up today which I will be supporting, H.R. 3662, page 8 states generally that when the commission completes its study on the last day of 1999, starting at line 4, page 8, that the Commission shall submit a final report to the President that shall contain any recommendations for such legislative, administrative or other action as it deems necessary or appropriate.

    Could you give us an indication as to what the types of recommendations might be forthcoming from the Commission?

    Mr. EIZENSTAT. We purposely, Congressman Manzullo, left this as general as possible because we cannot really forecast all of the things that might be recommended. But as an example, in Switzerland, one of the reasons that the Volcker Commission is now able to identify over 5,000 dormant accounts by name is because in their country dormant accounts remain the property of the bank in which they rest.

    In the United States, however, almost all the States have laws that an account that is dormant, meaning unused for say more than ten years, reverts to the State. And so the question of whether we would want to recommend, based on whatever findings might be made, that the States themselves participate in some way in trying to return assets to victims that could be identified might be one recommendation. So there could be a whole host of such recommendations.

    Second, we know that this Commission could not complete, and this I think is Congressman Bereuter's question, could not complete its work by December 31, 1999 if it had to do all the work itself. So we will have to rely on State banking officials, on insurance commissioners in the 50 States to help us do some of this work. I am sure they will be cooperative. But that again could be part of the series of recommendations, depending on what the insurance commissioners find happened to insurance policies that may never have been cashed because the victims did not show up, or perhaps premiums were not paid because they were in a concentration camp and so the policies lapse.
 Page 44       PREV PAGE       TOP OF DOC

    So all the mysteries that will be uncovered may lead to some recommendations, and we wanted to keep this language as general as possible so we did not foreclose any recommendations.

    Mr. MANZULLO. Thank you.

    Chairman LEACH. Ms. Kilpatrick.

    Ms. KILPATRICK. Thank you, Mr. Chairman. Last October the Congress passed and the President has now signed the relief legislation sponsored by Chairman Leach and Mr. Gilman. Today we discussed the commission legislation. And my first question is, what is the interface, if any?

    Mr. EIZENSTAT. That is a good question.

    The legislation that was passed last year provided over a 3-year period $25 million as a contribution into the Nazi Persecutee Relief Fund that was established as a result of the London Conference and into which we hope the countries who have claims on the remaining $60 million in gold will also put their funds. This, on the other hand, is legislation that will look solely at the responsibility of the U.S. for Holocaust-era assets that may never have been accounted for.

    Now, there could be an interrelationship. Because, for example, if we determine through this commission that X number of dollars can be found, it is conceivable that the fund to which the $25 million has already been contributed might be a repository for some additional amounts. That is, again, an open issue and the relationship therefore is not defined at this point, but you are quite right in pointing out that there could be.
 Page 45       PREV PAGE       TOP OF DOC

    Ms. KILPATRICK. In the first legislation, some $30 million I think was the figure. You may find in the second bill it may be twice that. What other funds are available?

    Mr. EIZENSTAT. No, if I may just clarify, the $60 million is the value of the 6 tons of gold that has never been distributed of the 337 tons collected by the Allies after the war. It sat there for 50 years. So that is a separate amount.

    What we have done is gone to some 10 countries that have claims on that gold, and who have already received over the past 50 years 329 tons on a pro rata basis, and we said, ''Look, we think some of this is victim gold, individual gold, and not yours, and that indeed you may have already gotten back unwittingly gold that belonged to individuals. Why don't you as a moral gesture contribute your share into this fund?''

    Ms. KILPATRICK. Is that likely?

    Mr. EIZENSTAT. Most of them are willing to do so.

    Ms. KILPATRICK. In the DC. conference that you are having, and I understand that you said this morning 42 countries have been invited who did participate in London, what are you hoping? I think Mrs. Maloney was asking and I did not hear it clearly. If there is no mandate, it is a gentlemen's agreement, I guess, between the various commissions to come to some resolve to address the problem. What do you hope will happen there?

 Page 46       PREV PAGE       TOP OF DOC
    Mr. EIZENSTAT. We hope a number of things will occur. First, that all the countries there will agree to open their archives and participate in the international web site that the doctor is indicating, so that you could go to that web site and find, whether it is Croatia or Italy or the Netherlands or France or Germany or the United States, what information you wanted.

    Second, we hope that there will be a complete closure and finding on the gold issue now that we have the Bergier report from Switzerland and our own.

    And third, we hope to explore issues that have not yet been explored, like looted art and insurance policies. In that respect, on the art side, the French government and its commission, President Chirac in a very courageous action has asked its commission to not only look at the question of Vichy France but try to identify looted art works that the Vichy France government and the Germans took from French citizens, some of which we know are hanging at the Louvre. So we want try to get into the art and also the insurance issue.

    Ms. KILPATRICK. Finally, I was in Israel last year with a group of people and this issue came up of the gold and what we were doing. Since then we have had several hearings in this committee and I guess the commission, and the October legislation is a combination of all of that. I, too, commend the work that has been done and am looking, anxiously awaiting, for your resolve.

    Mr. EIZENSTAT. Thank you. We appreciate your support, you and the Chairman and everybody else on the committee has given us.

 Page 47       PREV PAGE       TOP OF DOC
    Ms. KILPATRICK. Thank you Mr. Chairman.

    Mr. LEACH. Thank you Ms. Kilpatrick.

    Mr. Fox.

    Mr. FOX. Thank you, Mr. Chairman.

    Secretary Eizenstat, you are asking the five neutral countries, as I understand it, covered in the report to atone for their lively trade with Hitler's Germany with new financial contributions for an international fund for Holocaust victims. What do you expect these countries would do, and have you had any discussions with them concerning contributions?

    Mr. EIZENSTAT. Yes. Let me answer in a number of ways.

    First of all, Switzerland has already begun to make contributions. The three largest Swiss banks and the Swiss National Bank and a number of Swiss corporations have contributed to what is now a $200 million fund.

    Second, the Government of Argentina has pledged, although the amount is not yet determined, a contribution into the Nazi Persecutee Relief Fund.

    Third, we believe that the Spanish Government, again in a very courageous fashion, has recommended that a contribution of $1.6 million be made to the World Sephardic Organization, and we have asked that that contribution be passed through the fund. So we are hopeful that this will set an example for all the neutrals.
 Page 48       PREV PAGE       TOP OF DOC

    Sweden has also made a $1 million pledge for the fund. And Sweden has done something else that I think has even more long-standing implications. Because, as important as it is to have survivors paid for, they, like all of us, have a limited life span. Education is permanent. The Swedish Government has just announced a complete Holocaust education curriculum, the Prime Minister himself did, and Bennett Freeman on our staff was there for the announcement, that would go throughout their school system for elementary and secondary education, booklets on Sweden's role.

    This is the kind of follow-up that we hope Switzerland and other neutrals will follow. It is not just a question of money. It really is a question of education, learning the facts, learning the truth, and again going into the next century with our children and grandchildren and ourselves more knowledgeable about the lessons of the war and being able to apply those to the challenges we will have in the 21st century.

    Mr. FOX. Let me follow up. I appreciate your answer, Mr. Secretary.

    Should the U.S. be urging these countries to do more than make, as a follow-up to what you just said, more than make financial contributions? Should they be asked to issue formal statements acknowledging not simply financial responsibility but moral responsibility? And what, if anything, should they be doing as far as educational forums so that we never have Holocaust again in future generations?

    Mr. EIZENSTAT. I think on the education side it is my hope, again, that out of this relief fund some funds can be made for Holocaust education. I am also hopeful that out of some of the sums of money that are being collected, including perhaps the humanitarian fund that the Swiss have contributed to, that some funds can be used for Holocaust education in Switzerland and elsewhere. I think it is very important that places like the Holocaust Memorial Museum and the Wiesenthal Center and museums around the world have the capacity to educate our citizens.
 Page 49       PREV PAGE       TOP OF DOC

    In terms of statements from the governments, we have tried to be as nonjudgmental as possible. No country likes to be threatened. No country likes to be attacked. We tried to let the facts here speak for themselves. They are quite compelling. What we are hopeful is that the commissions that each of these countries have set up, and every one of the countries in this report and a dozen others almost have set up their own commissions, that those commissions will be as probing and as candid as the Bergier Commission has been. That will then help each country come to terms with its past in a much better way than our appearing to, you know, be telling them. I think that the Bergier report will have a more profound effect on Swiss opinion than the U.S. report because it is coming from their own hands.

    Mr. FOX. Thank you, Mr. Secretary. I believe that the ongoing mission with the Holocaust Historical Museum Commission and the Wiesenthal Center and what you have done certainly is part of the charge, what this committee is all about. We thank you for your leadership, Mr. Chairman, and for holding these hearings.

    Mr. LEACH. Mr. Bentsen.

    Mr. BENTSEN. Thank you Mr. Chairman.

    Mr. Secretary, I apologize for not being here for all your testimony, and I have not read your report, obviously. But I have two questions about it.

    First is, is there an international legal standard for liability for funds that are transferred between parties, to other parties? In your report you discuss how the neutral countries were providing war material to the German Government up even to the very end of the war, very much of that running through the Swiss National Bank. Is there a standard as to whether or not the liability would still exist with the Swiss National Bank or does it run to the supplying countries?
 Page 50       PREV PAGE       TOP OF DOC

    Because it also would appear from the hearings that we have had and what I have read about this issue that the restitution, and what my colleagues have been saying, the restitution to date has been quite insufficient. And from the data you have here and what you have reported before, there is still much, much more that needs to be done.

    Mr. EIZENSTAT. That is a very probing and difficult question. I am going to take a brief stab at it and then let Dr. Slany perhaps supplement it.

    First of all, there were two types of assets after the war that the Allies tried to get their hands on for purposes of helping reconstruct war-torn Europe and for the refugees. One was the gold, but the other which is often ignored, and we have on our chart, are what were called German external assets. Those were plants, equipment, Siemens, you know, other companies had invested, and we negotiated with each of the countries.

    Switzerland was supposed to give a 50–50 breakdown. They were supposed to liquidate the assets, which were estimated between $250 million and $750 million worth of German assets, and give 50 percent to the Allied cause. As it turned out, only about I think $28 million or so was actually transferred.

    But the argument was made, even by countries like Sweden that were relatively cooperative, that there was no international legal standard that required them to give up German external assets in their own country. The Allies insisted on this as more of a moral than a legal gesture. So there was a very unclear legal issue.

 Page 51       PREV PAGE       TOP OF DOC
    Second, I mentioned in my testimony that the Allies made an unfortunate interpretation of their own Bretton Woods declaration made during the war. The Bretton Woods declaration basically said, ''We know you are dealing to the neutral countries, we know you are dealing in looted gold, and we are not going to recognize as an international legal standard your transactions because of that. You are on notice that you are dealing in looted assets.''

    This became very controversial after the war and to this very day, with people saying, ''Well, we dealt with this in good faith. It is the supplier country that had responsibility, not us.'' The interpretation that was made after the war, which was most unfortunate and made it more difficult for us to get back the amount of gold that we should have, was that the responsibility for returning the gold only was on the first purchaser of the gold, in this case the Swiss National Bank. And since three-quarters of the looted gold that Spain, Portugal, Sweden, and Turkey got was through the Swiss National Bank rather than directly from the Reichsbank, they could in effect use this interpretation to say they did not have a legal responsibility.

    Now the question of whether there is a current international legal standard is something that I think I ought not to try to give an off-the-cuff opinion on. It is a difficult issue. There may end up being suits on this. And at this point I am not prepared to give a judgment. Suffice it to say it is certainly a contentious area, even today.

    Mr. BENTSEN. If I could ask quickly before you go on, are you able to determine in the case of the neutrals providing war material, were the Swiss National Bank or the other Swiss banks acting merely as an agent, or in some cases was this just a secondary supplier to a Swiss supplier?
 Page 52       PREV PAGE       TOP OF DOC

    Mr. EIZENSTAT. They were purchasing the gold directly and providing Swiss francs for it. That is essentially their role.

    In some cases, however, they held accounts for other central banks. So that, for example, the Spanish Central Bank had an account in the Swiss National Bank. Some of that may well have been and almost certainly was looted gold that the Swiss were holding.

    Dr. SLANY. Much of the gold that went from Germany to Switzerland was eventually obtained by the neutral countries, often by trade that they had conducted, sometimes with the Allies, which provided them with hard currency and allowed them to buy gold so they could buildup their own gold reserves. The movement of gold was complicated; it was not always that the gold was used directly to purchase products, but it had a more indirect banking function.

    Mr. BENTSEN. Thank you, Mr. Chairman.

    Chairman LEACH. Well, thank you.

    Mrs. Kelly.

    Mrs. KELLY. Thank you, Mr. Chairman.

    Mr. Eizenstat, I only want to say that I can only thank you for your continuing efforts to try to redress what I feel is one of the most sad and difficult chapters in the whole Holocaust.
 Page 53       PREV PAGE       TOP OF DOC

    I wanted to ask if you knew what the United States knew about the value of the neutral trade to the Nazi war effort?

    Mr. EIZENSTAT. That is a very good question. The fact is, and again I would like Dr. Slany to supplement this, we knew a great deal and we knew so much that we repeatedly, particularly from 1943 on, warned the neutrals and in some cases actually threatened them with sanctions if they continued the trade.

    In addition, we were aware of it because we developed preemptive buying programs of wolfram, for example, so that the U.S. was actually buying some of these products, and Great Britain, not because we needed them, because we had other sources and we were doing it at highly inflated prices, but because we wanted to keep them out of the hands of the Germans. We did the same with chromite from Turkey. We did this with Portugal and Spain for wolfram.

    So we were preemptively trying to buy as much as we could. We tried to get the neutrals, and we even reached agreements in some cases, some of which were abrogated surreptitiously, to agree to limit the amount of tonnage they were sending to Germany.

    Dr. SLANY. It was a case of conducting an economic war against the neutrals, but not conducting it in a way that would drive the neutrals into the arms of Nazi Germany. There was an enormous amount of intelligence that was collected by our OSS and or by diplomats, so that we knew relatively well how the trade was being conducted. Among the leadership in this country and our British ally, judgments had to be made as to how harshly to apply constraints. It was an attempt by this country and Britain to have a blockade around Nazi Germany, and the neutrals were these enormous holes in the blockade. The question was how to control them.
 Page 54       PREV PAGE       TOP OF DOC

    Mr. EIZENSTAT. If I can just respond on one other point, because I think it is an important point, There are some who argue that we were actually better off in this circumstance in having the Germans invade these countries and take 100 percent of their supply. At least we could limit that to some extent. And there is an argument to be made there.

    However, on the other side, the following has to be recognized,: The Germans did not have the military capacity, being spread so thin, to invade each of these countries. Second, if they had done so, the Allies would have fought them in these countries. And third, if they had done so, it might have destroyed the mines and other capacity to send the products to Germany. Germany was perfectly content with the arrangement they had.

    Mrs. KELLY. Do you think that trade sanctions might have been effective?

    Mr. EIZENSTAT. There were threats that were made, I think, Bill, against Portugal or one of the countries to cutoff oil, and it did have an effect.

    We found ourselves in an odd situation because some of our allies, particularly the British, were less willing to use sanctions and threats than we were. They relied, for example, on Argentina for meat, and they were not willing to threaten the Argentines. The same is true with some of the other countries.

    Dr. SLANY. The question of sanctions, since it was the only tool that generally the Allies had against the neutrals, it was a question among the Allies as to how hard to press the neutrals, how much pressing them into the German economy would in fact work against what we were trying to do. So it was a constant debate among Allied policymakers as to how far to go in trying to thwart this.
 Page 55       PREV PAGE       TOP OF DOC

    Mr. EIZENSTAT. In general I think it has to be said, in general, we, the United States, were more willing to be firm and tough than were some of our allies. Is that a fair statement?

    Mrs. KELLY. So there was a little bit of dissension amongst the allies?

    Mr. EIZENSTAT. Yes, and there was dissension after the war. One of the reasons that such a small percentage of amounts were recovered—we gave a number of factors, the cold war—one of the factors was the division between ourselves and our allies. We tended on average, on balance, to be more assertive and aggressive in trying to get restitution back in gold and assets from the neutrals than did our allies after the war.

    Mrs. KELLY. Thank you very much. Thank you, Mr. Chairman.

    Chairman LEACH. Mr. Sherman.

    Mr. SHERMAN. Thank you, Mr. Chairman.

    As we focus on those countries that were neutral or fit into that category, we should also remember those countries that were actually allies of the Axis. As there are various newly independent states and newly independent republics from Yugoslavia, I am personally troubled by those newly independent countries that glorify their puppet independent countries that may have existed during the 1940's. So to the extent that the focus here is on assigning blame and praise for actions 50 years ago, our focus should not only be on those countries that were neutral but also on those that were more or less voluntarily allies of the Axis.
 Page 56       PREV PAGE       TOP OF DOC

    Mr. Eizenstat, I want to join with all my colleagues in praising your work. This is a subject that has been studied before, but never so thoroughly and never with such impact on people around this country and around the world as the report that you released. And I want to praise Dr. Slany, as well, for this work.

    Mr. EIZENSTAT. Thank you.

    Mr. SHERMAN. Can you comment on which entities have been least forthcoming with information from their archives and other data that is under their control?

    Mr. EIZENSTAT. Well, this is just, this process is just beginning. Most of the 16 or so commissions have only just really begun their work, but some are far along. And I will let Dr. Slany perhaps talk about access to archives. But the Swiss archives, so far as I know, are now open as a result of the Bergier Commission's efforts. We believe that the Tripartite Gold Commission archives will be open by this summer. I think the British archives are quite open.

    We have asked each of the countries that have established their own commissions, Mr. Sherman, to open their archives, and we believe we have a good chance of getting that done. There are others, such as the Vatican, that we have asked that have not yet done so. We hope that they will follow suit, knowing the limits on their resources and respecting the limits on their resources.

    Bill, do you want to give any further comment?
 Page 57       PREV PAGE       TOP OF DOC

    Dr. SLANY. There is a tradition among the Western European democracies to open their archives. However, this is not a universal process, and it is one which is difficult and without precedent for a number of countries. As they are making progress, they are aware of the necessity.

    And our hope is that these commissions in fact meeting together, relating to each other, are providing the kind of encouragement and example which will allow all the countries that were involved during the war to take the step in making public archives which traditionally have not been opened even for the scholars. So this is a great opportunity coupled with a great necessity, and we are working among the various commissions to see that this is expedited.

    Mr. SHERMAN. I can understand your reluctance to criticize any other entity or country at this stage, since you are hoping that eventually everything that should be open will be open. I hope that six months from now or a year from now, if your optimism is not rewarded, that you will not be hesitant or shy in criticizing those that deserve to be.

    I would like to shift to the Czech Republic for a second. Secretary Eizenstat, I draw the conclusion here that if someone was forced to flee the Czech Republic during World War II, perhaps because they were Jewish and were subject to annihilation, and became a citizen of the United States at some subsequent point, the Czech Republic obstructs them getting their assets back by virtue of the fact that they are not residents or citizens of the Czech Republic?

 Page 58       PREV PAGE       TOP OF DOC
    Mr. EIZENSTAT. First of all, I appreciate the question. Most of the Czech Americans who write to us had their property confiscated by the communists during the communist era rather than during the Nazi era. The question, nevertheless, is just as pertinent.

    Almost all the countries in Central and Eastern Europe, the new democracies, with a few exceptions, Estonia, Bulgaria, almost all of the others have quite rigid citizenship and residency requirements. Some have been challenged in the courts, and the residency requirements in some cases have been thrown out. But nevertheless, as a whole, whether it is the Czech Republic, whether it is Poland, whether it is Slovakia, whether it is Hungary, it is very difficult for Americans who had been citizens to recover their property.

    It is also, I have to say, as a matter of international law, and I found this very painful personally but it is simply the fact, the international legal principle is that we, the United States Government, cannot espouse the claim of say a Czech American citizen if their property was confiscated at a time they were Czech citizens as opposed to American citizens.

    Mr. SHERMAN. So you are doomed for being a Czech citizen and you are doomed for being an American citizen.

    Mr. EIZENSTAT. Very difficult. We cannot as an aggregate, as we do, go in to the Czech Government, as we have and as I have, and say we hope these citizenship and residency requirements will be dropped. They are not fair. They are not in accordance with the international European standards.

    I have worked with the European Union. Because these are countries that are going to be members of the European Union, they ought to adopt citizenship and residency requirements that are compatible with those in western Europe. But in terms of espousing individual claims, we are very much limited.
 Page 59       PREV PAGE       TOP OF DOC

    Chairman LEACH. If I could interrupt for a second, I apologize. We have a vote on the floor. We have about 3 1/2 minutes left. And I would like, if possible, because we cannot return for 20 minutes or so and you are the last questioner, if it is all right with you, Mr. Sherman, that further questions be in writing and that way we can bring this panel in.

    Mr. EIZENSTAT. I would be glad to come up and talk with you about this.

    Chairman LEACH. Is that all right with you?

    Mr. SHERMAN. Yes. I just want to comment that as we spend money and perhaps blood to defend the Czech Republic, that we ought to insist on changes.

    Thank you.

    Chairman LEACH. I think that is a very fair observation. I apologize to my distinguished colleague.

    Let me then thank you, Secretary Eizenstat and Dr. Slany, and simply announce that the committee will be in recess pending the vote on the floor and to advise our future witnesses that it will probably be about 20 minutes before reconvening.

    The hearing is in recess.
 Page 60       PREV PAGE       TOP OF DOC


    Chairman LEACH. The hearing will reconvene.

    Our next panel consists of a series of eminent theologians and philosophers. The first is Father John Pawlikowski, who is Professor of Social Ethics and Co-chair of the Catholic Jewish Studies Program at the Catholic Theological Union at the University of Chicago. Since 1980, Father Pawlikowski has served as a member of the United States Holocaust Memorial Council; and I understand, because of the graduation this evening, he will leave after presenting his testimony.

    Our second speaker will be Rabbi Andrew Baker, who is the Director of European Affairs for the American Jewish Committee and a board member of the Conference on Jewish Material Claims Against Germany, which recently negotiated an agreement with the German government to compensate Holocaust victims living in the former Communist bloc states.

    Our third witness will be Professor Mark Larrimore, who is an Assistant Professor of Religion at Princeton. He is a specialist in the ethical ramifications and legacies of the Leibnitz theodicy; Leibnitz being a 17th century German mathematician and philosopher and his theodicy being a defense of God's omnipotence and a view of the existence of evil.

    Our fourth panelist will be professor Leora Batnitzky, who is an Assistant Professor of Religion also at Princeton. She specializes in Jewish thought, the philosophy of religion and of religious ethics.
 Page 61       PREV PAGE       TOP OF DOC

    And our final speaker will be Monsignor Lorenzo Albacete, who is a visiting scholar at St. Joseph's seminary in New York. Monsignor Albacete began his career as an aeronautical engineer but entered the seminary after learning his Ph.D. for the Navy Department was to be classified. Monsignor Albacete is also a visiting professor of theology at the John Paul II Institute campus in Rome, Valencia, and Mexico; and he has just returned from Rome and perhaps can give us a perspective from the Vatican.

    Chairman LEACH. Let me begin in order of introduction,
unless you have by prearrangement determined another order.

    Father Pawlikowski.


    Fr. PAWLIKOWSKI. Thank you, Mr. Chairman. I am grateful for the opportunity to address the committee this afternoon on the ethical dimensions of the Nazi gold question.

    As a social ethicist I have studied and published articles on the Holocaust for many years, focusing especially on the ethical implications and what I regard as the watershed event of 20th century western history. For me, the Holocaust inaugurated a new era in human self-awareness and human possibility, an era capable of producing unprecedented destruction or unparalleled hope.
 Page 62       PREV PAGE       TOP OF DOC

    With the rise of Nazism, the mass extermination of human life in a guiltless fashion became thinkable and technologically feasible. The door was now ajar for dispassionate torture and the murder of millions, not out of xenophobic fear, but through a calculated effort to reshape history and human identity, supported by intellectual argumentation from some of the best and brightest minds in the society. It was an attempt, Professor Emil Fackenheim has argued, to wipe out the ''divine image'' in history. ''The murder camp,'' Fackenheim insists, ''was not an accidental by-product of the Nazi regime. It was its essence.''

    What emerges as a central reality from the study of the Holocaust is the Nazis' sense of a new Aryan humanity freed from the moral restraints previously imposed by religious beliefs and capable of exerting virtually unlimited power in the shaping of the world and its inhabitants. In a somewhat indirect, though still powerful way, the Nazis had proclaimed the death of God as a governing force in the universe. In pursuit of their objective, the Nazis became convinced that all the so-called ''dregs of humanity'', first and foremost the Jews, but also Poles, Gypsies, gay persons and the disabled, had to be eliminated or at least their influence on culture and human development significantly curtailed.

    The late Israeli scholar of the Holocaust, Uriel Tal, argued that the Nazi ''Final Solution'' had as its ultimate objective the total transformation of human values. Its stated intent was liberating humanity from all previous moral ideals and codes. When that so-called liberation process was complete, humanity would be rescued once and for all from subjection to God-belief and its related notions of moral responsibility.

    Despite their barbarity, the Nazis were perceptive at least on one point. They clearly recognized that human power was escalating toward an unprecedented level unknown in history. Futurists, such as the Catholic political scientist Victor Ferkiss and others, have identified the same development. In his volume, ''The Future of Technological Civilization,'' Ferkiss puts the late 20th century challenge to humankind in these words: ''Man has achieved virtually god-like powers over himself, his society and his physical environment. As a result of his scientific and technological achievements, he has the power to alter or destroy both the human race and its physical habitat.''
 Page 63       PREV PAGE       TOP OF DOC

    It seems clear to me that a major ethical challenge of the Holocaust is the enhanced responsibility of the human community for the direction of our global society. Part of that responsibility is to ensure that victims of the destructive use of human power, such as the Jews and other Nazi victims, are not forgotten, or as Elie Wiesel has put it, ''killed a second time.''

    In light of this fundamental challenge to human responsibility posed by the Holocaust, I should like this afternoon to offer a few reflections on why our present generation has a clear responsibility to address the Nazi gold and related issues.

    My former seminary classmate, Thomas Moore, in his New York Times best seller, ''Care of the Soul'', argues that when the ''soul'' is neglected it just does not go away. Rather, it appears symptomatically in obsessions, addictions, violence and the loss of meaning. I believe we can extend Moore's notion to the ''soul'' of society at large. In a very real way, society lost its soul during the Nazi era. We can recover it today only by clearly coming to terms with it.

    Our present generation will not restore its wholeness until extended complicity with the Nazi effort, uncovered through the Nazi gold issue, is clearly confronted. It is not a question of our generation accepting blame for what happened; but it is a question of accepting responsibility for what occurred through decisive actions of reconciliation toward the survivors, their children and their communities.

    President Havel of the Czech Republic, in his powerful essay ''The Power of the Powerless'', speaks of the destructive effect of the ''lie'' on Communist societies. It ate away at the very core of meaning in these countries. In my judgment, following President Havel, disregarding the realities connected with the mass theft involved in the Nazi gold and stolen art questions continues a ''lie'' at the heart of our society. The end result is a corruption of meaning and integrity until our generation takes positive steps to tell the truth about the matter in word and in deed.
 Page 64       PREV PAGE       TOP OF DOC

    To restore truth to society today requires reconciliation. In my own church, Pope John Paul II has recognized the central significance of this as part of the preparation for the millennium. In words and gestures in recent years he has extended apologies to Jews, Protestants, people in colonial areas and others for the wrongs inflicted upon them throughout history by Catholic believers. If we are to enter the next century as morally whole people in the Western world, we, too, must achieve a measure of reconciliation with the survivors of the Holocaust and their kin.

    But, as several of my colleagues in social ethics have underscored, there is no quick or easy process of reconciliation. One of the leading ethicists on the issue of reconciliation, Professor Gregory Jones, has identified several stages in the reconciliation process. They are: repentance, contrition, acceptance of responsibility, healing and, finally, reunion. In terms of the Nazi gold and related issues, there is need, first of all, to clearly acknowledge what occurred and to take unqualified responsibility for it. After that, ways must be found to bring about the requisite healing and reunion through financial compensation and other means.

    It is not for me, Mr. Chairman, to detail specific ways for achieving such reconciliation and reunion. I know from my involvement in the work with the U.S. Holocaust Memorial Council, which has been significantly involved in this process, that many feasible plans exist. My goal today has been simply, but strongly, to assert that our generation has the responsibility to heal the rupture, the ''lie'', the loss of ''soul'' in Western society resulting from the Nazi gold question. If we fail to take up this human responsibility challenge, not only will we be ''killing the victims a second time'', but we will be perpetuating a cancer, a moral ''ozone layer'' hole in our society. This, Mr. Chairman, will erode the moral ethos in our society precisely at the time when we need it most, at a time when the human community is beginning to face unprecedented challenges to human responsibility on a global scale.
 Page 65       PREV PAGE       TOP OF DOC

    Let me add, Mr. Chairman, both my support for the bill, H.R. 3662 and also to say that I fully support Ambassador Eizenstat's call for the opening of the Vatican archives. The late Cardinal Joseph Bernadin made such an appeal at a conference several years ago.

    I would want to tell you that several weeks ago, here in Washington, the Church Relations Committee of the U.S. Holocaust Memorial Museum, which I chair, had a working luncheon with Cardinal Cassidy, who was here on other business, to discuss this issue at length and to try to create a process whereby the Vatican archives might eventually be opened, a process that would involve some initial steps of the archivists from the United States Holocaust Memorial Museum and other institutions coming into contact and discussion with Vatican archivists in order to create a sense of trust and so on. But I want to go on the record as fully supporting, along with the late Cardinal Bernadin, the idea that the Vatican archives should be made accessible in this whole process.

    I apologize, Mr. Chairman, for having to leave shortly because of graduation at my institution this evening.

    Chairman LEACH. Thank you, Father. And did you indicate earlier you had something else you wanted to insert?

    Fr. PAWLIKOWSKI. No, it was just on the Vatican archives. That was not in my original testimony.

    Chairman LEACH. All right. Thank you.
 Page 66       PREV PAGE       TOP OF DOC

    Rabbi Baker.


    Rabbi BAKER. Thank you, Mr. Chairman. It is an honor to be here this afternoon.

    Today, one can walk through the old, unrenovated pre-war apartment buildings in Budapest or Krakow or in Prague and see the telltale signs. If you look closely in the entranceways, to the upper right side of the apartment doors, you are likely to see a bare spot, three or four inches long, tilting inward, an indication that a mezuzzah was once affixed, a sign that a Jewish family once lived in the apartment.

    The vast majority of those Jewish families did not survive the Holocaust. The lucky ones managed to flee and start a new life elsewhere. A few remained or returned after the war. Most of those Jewish families living in those apartments did not have Swiss bank accounts or own French impressionist paintings. They had simple collections of furniture and household objects that most of us would recognize. With few exceptions, the contents of those apartments and the apartments themselves all found their way to neighbors and strangers, to the ''neutral'' ordinary people who in a thousand different ways also profited from the Holocaust.

    We know there are stories of ordinary people who did extraordinary things during the Holocaust. Their stories are important, even vital, to our own belief that, even in the darkest of times, people could behave morally, people could act justly and compassionately. But as morally uplifting as these stories are, we know they are the exceptional ones. Sadly, the vast, vast majority of ordinary people during the Holocaust did nothing extraordinary. They were bystanders, or beneficiaries, or passive participants—or, even when pressured, active participants—in the crimes of the Holocaust. And, ironically, now, all these decades later, their stories are the ones we are examining.
 Page 67       PREV PAGE       TOP OF DOC

    It is unusual, even counter-intuitive, that there should be such intense interest in the events of the Holocaust and its immediate aftermath today, over 50 years later. One might have expected that half a century would have relegated this subject to a small circle of historians and archivists. But this is not the case. Rather, it is quite the opposite. The attention and the urgency today are far greater than they were in the years immediately after the war's end.

    We can understand the deeply-felt desire of many Holocaust survivors to ensure that the complete and truthful story of their experiences will be told to successive generations. We recognize that there are still so many tangible injustices—looted property, bank accounts, other assets—that have, until now, not been corrected. We sense the imminent closing of this century along with the passing of a generation that experienced the horrors firsthand, and we feel the need to bring closure to this sad and awful chapter of human history.

    Thus, we have undertaken to close the gaps in our knowledge of history, to tally the accounts of the stolen goods, and to provide restitution and compensation to those who suffered. But it is a daunting task. Here in America and in Western Europe, despite half a century of democratic and open societies, we are still, today, unearthing information that was hidden or that was ignored.

    The death last month of Telford Taylor, the great prosecutor of Nazi war crimes at Nuremberg, reminds us of the efforts to bring the criminals of the Third Reich to justice. Bringing to justice those directly responsible for the horrors of the Holocaust has itself been a decades-long task, and it is still not over. An understanding of how people could carry out such evil crimes will no doubt elude us even after the last perpetrator has passed from this world.
 Page 68       PREV PAGE       TOP OF DOC

    But, perhaps equally vexing is an understanding of the behavior of the ordinary people who stood by, who allowed those crimes to occur, the hundreds of thousands of individual ''neutrals'' who also bore responsibility for what took place. Only in recent years has attention focused on this group.

    An exhibition on the role of the Wehrmacht during the Second World War has been attracting record crowds in Germany and Austria. It has dispelled the myth that somehow regular German army troops were kept separate from the awful deeds ascribed to the Nazi SS forces. This was no deeply-held secret. It was common information readily shared by thousands of ordinary soldiers in letters to family members back home, often accompanied by amateur photos of grizzly atrocities. This is why it has been so difficult and controversial for Germany to mourn the fallen soldier, whether at Bitburg Cemetery or at the new memorial in the center of unified Berlin.

    But, the problem of understanding the bystanders did not start here. There is another military cemetery in Berlin that is located in the center of the largest Jewish cemetery in Europe. It contains the orderly white stone markers of Jewish soldiers who fought for Germany during the First World War. Many of them were decorated veterans. But such veterans were among the first to feel the effects of the Nazis' rise to power. They suffered the slights and indignities and the loss of benefits and honors that they thought they had earned with their blood.

    Of course, the race laws promulgated by the Nazis covered all aspects of society. The Jewish directors of banks and insurance companies were dismissed; the Jewish professors at universities and the Jewish doctors at medical faculties were sent away. Jewish-owned businesses were sold or expropriated. And in all these situations, others benefited. Colleagues, associates, perhaps even friends filled the jobs or inherited the assets of their unfortunate Jewish neighbors.
 Page 69       PREV PAGE       TOP OF DOC

    Last year, the Greek government and the Jewish community of Salonika dedicated a memorial to the Jewish victims of the Holocaust. Before the war, Salonika was virtually a Jewish city. In fact, it was the only seaport in Europe which ceased operation on Saturday, on the Jewish Sabbath. Over 90 percent of its Jews perished at Auschwitz.

    Andreas Sefiha, President of Salonika's small Jewish community today, was a boy when German soldiers occupied the city. They politely came to his father's photography store and confiscated his cameras. They were so efficient they even had an inventory list supplied by the Leica Camera Company in Germany, and they took his father with them to the post office so they could confiscate the most recent shipment which had yet to be delivered. The cameras were sent back to Germany, and his father was given a receipt. In successive months, other assets of the Jewish community were collected and sent back to Germany. These included gold jewelry and gold coins. And, eventually, it was the Jews themselves who were collected and sent away.

    Sefiha and his family were among the very few who survived, and eventually the postwar German government compensated the Jewish community for the stolen gold coins. The Reichsbank documents had accurately recorded the gold transshipment from Salonika, and that was sufficient evidence for Bonn to pay compensation. But the cameras were a different matter. Amazingly, Sefiha's father still had the receipt. The problem, however, was not where the cameras came from, but where they went to. Government officials in Bonn explained that, as there was no way of knowing whether the Germany they were sent to had become part of East Germany or part of West Germany, they were unable to provide compensation.

    The current discussions about neutral countries demonstrate how difficult it has been even for Western societies to come to terms with their past. This is also evident in the long-overdue declarations by the Austrian government and by the French president, but it is even more problematic in Eastern Europe and the former Soviet Union, where public discussion was not even possible until after the fall of communism. In some of these countries, particularly the Baltic states, there was no opportunity for any critical examination or self-reflection.
 Page 70       PREV PAGE       TOP OF DOC

    I was invited last month to travel to Tallinn, Estonia, to discuss this subject with President Lennart Meri and then to join him in Riga, Latvia, in a meeting of the three Baltic presidents. At that meeting they jointly announced their intention to create historical commissions in each country. They deserve credit for this decision. These undertakings will not be easily implemented. President Meri expressed his own doubts at even identifying historians in Estonia who would be up to the task. ''Too many of them are former Marxist-Leninists,'' he said, ''who have simply changed the plus signs to minus and the minuses to plus.''

    These efforts being undertaken now by Under Secretary Eizenstat, by this committee, by its counterpart in the Senate, are intended to bring some measure of justice and compensation to needy Holocaust survivors who are still alive today. It is remarkable that they have endured, and we must do all that we can for them while they are still among us and while we have this opportunity.

    But travel today through Eastern Europe and the former Soviet Union and you will see another form of survivor equally remarkable, not simply Jews but Jewish communities. They may be only a shadow of what once was a vibrant, large center of Jewish life, but, like grass between the concrete, they are growing against all odds. They will benefit from their society's critical confrontation with the past. They must benefit from the restitution of at least a portion of the prewar communal properties and assets to rebuild and to become self-sufficient.

    More and more buildings will be refurbished and repainted, and most of those small, bare spots on the door will disappear. But on at least a few of those newly-renovated door posts there will be mezuzzot and there will be a sign that there are still living reminders that Jewish life endures.
 Page 71       PREV PAGE       TOP OF DOC

    Thank you very much.

    Chairman LEACH. Thank you, Rabbi.

    Professor Larrimore.


    Mr. LARRIMORE. Mr. Chairman, I am honored to have been invited to join this distinguished panel on the moral implications of the Holocaust. I approach this question from the perspective of scholarship and philosophy and, really, the studies on ethics and the problem of evil.

    Among the reasons the Holocaust went unstopped for so long was disbelief. Reports of the killing factories at Auschwitz and elsewhere were dismissed as incredible by United States' officials contacted by members of the Polish underground, no less than by German Jews who did not flee Germany while they still could. In reports of the liberators of the deaths camps, too, the language of disbelief is pervasive. And the first generation of writers who made their way gingerly about the cataclysm spoke repeatedly of the no longer credible state of inherited understandings of human nature, civilization, religion, ethics, even of language after the Holocaust. After Auschwitz, nothing human made sense any more.

    This sense of disbelief, of shock, has perhaps been the major way of thinking about the significance and legacy of the Holocaust for people living with and after it. But I want to suggest today that it needs to be reconsidered. For the Holocaust doesn't shock us in that way anymore, at least not those of us born too late to experience a pre-Holocaust world. In its very calculated barbarity and its very use of what Primo Levi has called ''useless violence'', the Holocaust makes sense to us, as much sense, in any event, as anything else people do, good or evil or indifferent.
 Page 72       PREV PAGE       TOP OF DOC

    Born two decades after the war, I don't have the luxury of saying that the acts of the perpetrators are unintelligible or incomprehensible, because these acts are among those human behaviors my notions of the intelligibility and comprehensibility of human action were designed to account for. The map with the help of which we try to orient ourselves as human beings trying to live good and decent lives today is a map with Auschwitz securely on it. Protestations of incomprehension risk becoming merely rhetorical, even nostalgically sentimental.

    This is, of course, in no way to suggest that the events of the Holocaust are not shocking; as the disbelief of millions then and now attests, they are. But can we still be shocked in the same way? Those who lived at least part of their lives before the Holocaust, or before news of the Holocaust became known, had a certain faith that things like the Holocaust could not happen, which we now cannot but see as having been an illusion. To try to recover that illusion is both futile and dangerous.

    Without that illusion, however, our shock is likely to take an on affected character. We mouth the words, ''I can't believe human beings were capable of this,'' but deep down we know perfectly well that they are capable, that they have indeed always been capable of this. We are horrified, but the shock is not the same as finding out that someone you thought incapable of killing is a killer. Our horror on encountering an aspect of the Holocaust we did not know of—or reports of atrocities in Cambodia or Rwanda or Bosnia, or earlier in human history—is that of someone seeing a proven or a suspected killer kill again. One might say we have lost the sense of what a truly innocent person is, of a person who is not a potential killer.

    This illusion destroyed by what we know happened in and on the way to the death camps, is irretrievable to us today as a candidate for belief, as irretrievable as a thoroughly extinguished religion. Or, to give a more recent example, the unthinking confidence in the moral superiority of European civilization, which was, by all accounts, destroyed by the butchery of the First World War. The senseless savagery we know the imperial European powers were capable of on the battlefields of the Great War makes us see the prior history of these countries, as well as their relations amongst each other and with their colonial subjects, in a manner radically different from any which was available to them.
 Page 73       PREV PAGE       TOP OF DOC

    In the same way, the rise of Nazism has changed irrevocably the way we understand much more than just 20th century German history, including the enlightenment, the reformation, the inquisition, the crusades, as well as the moral blindness of the slave-holding United States.

    I say ''we'' here somewhat unconfidently. Audience reactions to the film ''Schindler's List'' seem to show that many people have yet to be shocked in the way I say we no longer can be. But I wonder how many of even those viewers of the film, who apparently knew next to nothing about the Holocaust, had not already assimilated the idea that human beings are capable of such crimes from television and other films. For them, too, this shock of seeing ''Schindler's List'' would have been like finding out a potential, a suspected, killer has, in fact, killed.

    I don't recommend an approach to human beings—oneself always included—as potential killers. It is not something one can choose to have. I want, rather, to suggest that, after Auschwitz, not seeing people that way is naive, perhaps culpably so, at least to the point of departure for ethical and political reflection. More, in many cases, the naivete is affected, or dishonestly gained.

    What I mean by affected naivete is that of someone who looks away from something she knows is there because she doesn't want to see, as so many of us avoid eye contact with the homeless and turn the pages of the newspaper which report the ongoing agony of countries in famine or civil war, or of poverty and disease in our own lands. By dishonestly gained naivete, I mean the varieties of fatuous faith that ''it can't happen here,'' which are often stowaways in the indispensable work of reconstructing the concrete historical reality of the Holocaust.
 Page 74       PREV PAGE       TOP OF DOC

    As we name and commemorate its victims, name and condemn its perpetrators, and try to make sense of the behavior of these perpetrators as well as of those people who looked on or looked away, the indifferent and the acquiescing, those who actively and those who passively profited from the fate of their neighbors, a group we are rapidly coming to realize extends well beyond the limits of Nazi Germany and its allies, as the work of this committee has shown, we may unwittingly lend solace to those who think the Holocaust an expression only of the potential for evil of some, perhaps reassuringly few, members of the human race. We ought to know better. It could happen anywhere. Knowing this, we are doubly responsible should we let it happen again, more responsible than most of those who lived in the time of Auschwitz.

    The sense of responsibility is liable to arrive together with a feeling of futility, of despair, or at least skepticism concerning the capacity of human art, reflection and legislation to curb the potential for evil in us. The more we learn about the involvement of or acquiescence in or profiting from evil of ordinary, as well as extraordinary Germans and others, the harder it becomes to think that anything straight can be made from the crooked timber of humanity.

    I want to spend the rest of my remarks recommending a book which faces these problems more honestly than anything else which I have read, the late Philip Hallie's book, ''Tales of Good and Evil, Help and Harm'', which appeared last year. This book records a passionate moral philosopher's lifetime of grappling with the often desperate skepticism any prolonged engagement with the Holocaust is bound to produce. ''Tales of Good and Evil'' tells of his effort to make sense of the possibility and significance of human goodness in the face of the depressing reality of what, borrowing from e.e. cummings, he calls ''manunkind''. Hallie's book is an excellent guide for us as we consider how to balance memory with action and realism with hope.
 Page 75       PREV PAGE       TOP OF DOC

    You may know Hallie as the author of the book ''Lest Innocent Blood be Shed'', his deeply affecting 1979 book on the moral heroism of the small French town of Chambon during the German occupation of France, a town which saved the lives of thousands of Jewish refugees, most of them children, at great risk to itself. ''Tales of Good and Evil'' shows us how the discovery that, as he puts it, ''goodness happened'' in le Chambon changed Hallie's understanding of human nature and of ethics, but also that his moral questioning did not end, that it continued beyond this discovery. Hallie's explorations help us to a chastened awareness of the goodness of good in the absence of any confidence in the goodness in most of us, including ourselves. He grapples with despair and skepticism, both about the possibility of genuine goodness and about its odds of survival in a world of morally complex people and situations in which goodness appears as rare and strange as the eye of a hurricane.

    I would like very briefly to mention three aspects of his book of particular relevance to the question of what we can yet hope for in ethics in the age of ''manunkind''. First, as I have mentioned, ''Tales of Good and Evil'' describes a lifetime of restless searching. The discovery of the goodness at le Chambon saves Hallie from one kind of despair, but plunges him into a new kind of doubt, as he considers the insignificance of such goodness in the struggle against evil, as well as its inaccessibility to people like himself. Hallie goes on to explore other cases of moral heroism, producing an intensely personal and ever more complex—and yet never final—account of the continuing wonder of that rare thing, human goodness. ''Tales of Good and Evil'' is a book of ethics for our time because it chronicles rather than concealing the never-satisfied searching for meaning and hope in human affairs, which is one of the legacies of the Holocaust.

 Page 76       PREV PAGE       TOP OF DOC
    This leads to a second instructive aspect of Hallie's work. He finds in his searching that stories alone make ethical concepts real and believable to him. I said earlier that the Holocaust makes sense—as much sense as anything else people do, good or evil or indifferent. ''I didn't mean it.'' That doesn't mean that I think any human actions make ultimately satisfying sense at all. Our understanding of the human is now crippled, and most every kind of human act can seem quite natural or totally extraordinary from the vantage point of some theory of human nature. No theory, however, seems to be able to make sense at once of the very great evil and the very great good of which human beings are capable. In this context, concrete tales of human good and evil, of help and harm, are the only way to conquer—however fleetingly—the skepticism which is the natural response to this untransparency of human nature to itself.

    A third and final point: When Hallie discovers goodness, he is shocked by it. His shock is only deepened by the discovery that the heroes of le Chambon refused to think of themselves and their actions as good.

    He describes a conversation with one citizen, whose description of her town's heroism makes him whisper involuntarily under his breath, ''But you are good people, good.'' To which his interlocutor responds: ''I'm sorry, but you see, you have not understood what I have been saying. We have been talking about saving the children. We did not do what we did for goodness' sake. We did it for the children. Don't use words like 'good' with me. They are foolish words.''

    With wonder, Hallie ruminates on the utter self-evidence of good, the sense in which it seems to its agents natural, ordinary, quite matter-of-course. Hallie, indeed, regularly indeed invokes the language of a sacred ''mystery'' when discussing goodness, mysterious in an almost paradoxical way, as when he characterizes good as ''a beautiful, useful and utterly clear mystery.'' A clear mystery? What Hallie is struggling to describe here is the great mystery that it is precisely the naturalness, the ordinariness, the banality of true good, as it is understood by its agents, that is most shocking to us in the age of ''manunkind''. It shows us that human good is possible, too, but not how to get there from here. And so it renders us more, not less, aware of the brokenness of our understanding of ourselves.
 Page 77       PREV PAGE       TOP OF DOC

    In this lies an important lesson. As Hallie helps us see, what the Holocaust presents us with may well be the problem not of evil but of good. For, in some ways, extreme good has become incomprehensible to us now as extreme evil was to the generations who lived before Auschwitz. While it is necessary that we come to as concrete and detailed an understanding of the events of those dark days as possible and while it is important that people be shocked out of the varieties of affected and dishonestly gained naivete, it is needful also to collect tales of good to combat the skepticism and moral numbness which are natural responses to the era of ''manunkind''. Without reminders that human beings, potential killers all, are also potential savers, we are in danger of losing our capacity to be shocked out of despondent acquiescence into action in the effort to ensure that such crimes never happen again.

    Thank you.

    Chairman LEACH. Thank you, Professor.

    Professor Batnitzky.


    Ms. BATNITZKY. Mr. Chairman, thank you for the opportunity to speak.

    What is owed to the victims of the past and who owes it? As we all know, questions about restitution to victims of the Holocaust remain with us. In the short time allotted me today, I would like to explore briefly connections between economic and moral restitution and relate them also to questions of forgiveness and expiation. Finally, I would like to reflect, again very briefly, on the moral significance of these issues for those of us who neither experienced nor participated in the crimes of the Nazi genocide.
 Page 78       PREV PAGE       TOP OF DOC

    I cannot do justice today to the question of how the Nazi genocide may or may not fit into our picture of the nature of good and evil. I suggest, however, that we can only begin to think about what the victims and the families of the victims are owed by thinking about a vice that is at once completely ordinary and completely devastating. This is the human vice of cruelty. The attempted genocide of the Jewish people could be viewed as a case study of the extremes of cruelty.

    The late political theorist Judith Shklar defines cruelty as, ''a deliberate and persistent humiliation, so that the victim can eventually trust neither himself nor anyone else.'' How is it possible to repair such deliberate and persistent humiliation and, perhaps more difficult, to restore a victim's trust in himself and in others?

    First, it is necessary to understand the depths of Nazi cruelty. In a reflection connected to the title of his famous memoir, ''The Sunflower'', Simon Wiesenthal expresses the lingering horror of Nazi cruelty. Wiesenthal relates an experience he had while marching as a prisoner in a Nazi labor camp.

    He writes, and I quote, ''Our column suddenly came to a halt at a crossroads. I could see nothing that might be holding us up, but I noticed on the left of the street there was a military cemetery. The wires were threaded through the sparse bushes and low shrubs, but between them you could see the graves aligned in stiff rows. And on each grave there was planted a sunflower, as straight as a soldier on parade. I stared spellbound. The flower heads seemed to absorb the sun's rays like mirrors and draw them down in the darkness of the ground as my gaze wandered from the sunflower to the grave. Butterflies fluttered from flower to flower. Were they carrying messages from grave to grave? Were they whispering something to each flower to pass on to the soldier below? Suddenly, I envied the dead soldiers. Each flower had a sunflower to connect him with the living world, and butterflies to visit his grave. For me, there would be no sunflower. I would be buried in a mass grave, where corpses would be piled on top of me. No sunflower would ever bring light into my darkness, and no butterflies would dance above my dreadful tomb.''
 Page 79       PREV PAGE       TOP OF DOC

    The Nazis took from their Jewish victims not only their lives, but their deaths also. Murder violates not just the victim's right to life, but the victim's right to a natural death. But the Nazis were not ordinary murderers. The Nazis attempted both to murder their victims and to erase their memory from the face of the earth. Wiesenthal's reflection brings into focus not only the Nazi attempt to murder the Jewish people, but the cruel attempt to destroy their memory, their connection to their past, along with the world's memory of them. It is a connection to a past, both to their own past and to the world's memory of its past, and not material gain, that victims and their families seek from restitution.

    Once we consider, even as inadequately as I have just done, the loss inflicted upon and experienced by the victims of the Holocaust, it becomes clear how ludicrous and morally offensive is the notion that economic restitution is actual compensation for Nazi crimes. Economic restitution is not compensation, nor can it buy forgiveness or even introduce that possibility. Absolution from guilt clearly is not something that can be bought or sold. Furthermore, it is only for the victims of the Holocaust, the large majority of whom were murdered, to forgive their murderers. However, when accompanied by moral restitution, economic restitution can be an act of repentance. As both the Jewish and Christian traditions insist, true acts of repentance are ones that do not expect forgiveness in return. True acts of repentance are those whose only end is repentance itself.

    But what does it mean to make moral restitution? Does moral restitution amount simply to an apology? Furthermore, who is responsible for making moral restitution? This last question is especially important since, as we move into the 21st century, we are moving into an era in which neither persecutor nor victim will remain. In a very real sense, then, moral responsibility for the legacy of the Holocaust becomes increasingly our own.
 Page 80       PREV PAGE       TOP OF DOC

    To even begin to broach these questions we must return again to the most heinous aspect of the Nazi crime: the attempt to destroy not only the present and the future of the Jewish people, but their past and the world's memory of their past also. It is this connection to a past, and our responsibility to answer for that past, that not only defines human decency and responsibility, but also constitutes our very identities.

    As the moral philosopher Alasdair MacIntyre writes, and I quote, ''I inherit from the past of my family, my city, my tribe, my nation, a variety of debts, inheritances, rightful expectations and obligations. These constitute the given of my life, my moral starting point. This is in part what gives my life its own moral particularity.''

    Every individual benefits in some way from his or her historical or cultural inheritance. Because each and every individual benefits in some way from being part of a nation or group, each and every individual must also answer for the past deeds of that nation or group.

    Many Christian and Jewish thinkers have historically been uncomfortable with some of what the Hebrew Bible, also known as the Old Testament, has to say on the issue of responsibility for the past and the debt we owe to the past. I am referring in particular to Exodus, Chapter 34, Verses 6 through 7, where we read a description of a vengeful God. I quote:

    ''The LORD! The LORD! A God compassionate and gracious, slow to anger, abounding in kindness and faithfulness, extending kindness to the thousandth generation, forgiving iniquity, transgression and sin; yet He does not remit all punishment, but visits the iniquity of parents upon children and children's children, upon the third and fourth generations.''
 Page 81       PREV PAGE       TOP OF DOC

    The conception of inherited guilt expressed in this text does not mitigate but rather gives greater moral significance to our own actions. Just as individuals benefit for generations to come from the good deeds and accomplishments of their ancestors, so too individuals must bear the burden of their ancestors' sins. The Biblical text recognizes a fundamental moral truth of the human condition: There are indeed some deeds that are so horrible that their effects are felt for many generations. All of us owe a debt to the past, both for what is good and for what is wrong with our world. To make moral restitution for the past is to recognize and acknowledge this debt.

    Once again, in MacIntyre's words, I quote: ''I am born with a past; and to try to cut myself off from that past . . . is to deform my present relationships.''

    But does this analysis of the basic features of human identity imply that all third parties—all those who do not fall directly into the categories of victim or persecutor—are equally responsible for the Holocaust? Certainly not. Debts are as particular as crimes. The historical beneficiaries of those who benefited, whether militarily or economically, from Nazi crimes owe particular debts connected to the particular legacy of their nation's past. I do suggest, however, that we Americans, while not the historical beneficiaries of Nazi crimes, also owe a particular debt to keep the memory of the Holocaust alive as well as to incorporate that memory into our national identity.

    As we move into the 21st century, it is essential that we take a broader view of history, in which we recognize that the boundaries of history are not so firmly drawn. The Holocaust is part of our history not only because there are so many American citizens of Jewish and European descent, but also because our own history and, hence, our present identities have been and are shaped by the Holocaust. The American Nation is implicated in the legacy of the Holocaust, for better and for worse, both for what we did do and for what we did not do, to counter the Nazi genocide. Furthermore, the Holocaust reminds us that democracy must be guarded preciously. Sadly, we must remain ever vigilant to the fact that we are not less susceptible than Weimar Germany was to antidemocratic tendencies.
 Page 82       PREV PAGE       TOP OF DOC

    But is moral restitution simply a matter of adopting a particular attitude? I need not remind anybody that attitudes, and words, can be cheap. It is here that the material aspect of restitution once again becomes relevant. For the European nations and their descendants, and for the Jewish victims and their families, economic restitution is a material link to a past that has been forever destroyed. In America, our obligation to the past must take material form also. Material reminders of the Holocaust, such as memorials, museums and, first and foremost, Holocaust education, allow us not only to remember the past, but also to shape our present and future identities as democratic citizens of both America and the world.

    Thank you.

    Chairman LEACH. Thank you, Professor. That was very thoughtful.

    Monsignor Albacete.


    Monsignor ALBACETE. Mr. Chairman, I am honored to have been asked to join these other distinguished scholars today in this hearing.

    I must say that when I told friends of the invitation to speak before this committee, and even some Vatican authorities last week, they all roared with laughter at the idea that I had anything to say to a committee on banking and financial affairs. You see how my friends think of my competence on these matters.
 Page 83       PREV PAGE       TOP OF DOC

    Obviously, my presentation is not about banking or financial affairs. It approaches the topic from a faith-seeking understanding. The title which I have given to my remarks, ''The Mystery and the Holocaust'', expresses what I believe is the necessary perspective with which faith in God approaches this topic. Faith, and the theologies that originate in it, cannot claim to understand such evil as that of the Holocaust. No one can honestly go beyond what the author of the book of Job understood: All ''explanations'' for the reality of innocent suffering are false and must be rejected; the response of the believer must be a personal solidarity with those who suffer by suffering with them, that is, by being willing to share the existential anguish of their question—why?—and turning this question into a prayer for redemption.''

    Still, there is a perspective of faith I would like to offer, a thought, if not about the why of the mystery of iniquity, then about a dangerous trend in contemporary culture that weakens our ability to defend ourselves from horrors of this kind. I have in mind our contemporary doubt about the capacity of the human mind of reason from knowing with certainty what is good and what is evil. In particular, I would like to underline the danger in the separation between reason and the religious sentiment.

    The introduction of the first edition of Elie Wiesel's ''Night'', the first book of his trilogy on the Holocaust, was written by the French Catholic author Francois Mauriac. As a young Israeli journalist, Wiesel had once come to interview Mauriac for a Tel Aviv newspaper. Mauriac told him that the sight of Jewish children forcefully separated from their mothers at the Austerlitz train station made him touch, and I quote, ''. . . for the first time that mystery of iniquity whose revelation was to mark the end of an era and the beginning of another. . . .''
 Page 84       PREV PAGE       TOP OF DOC

    Then Mauriac makes this observation: ''The dream which Western man conceived in the 18th century, whose dawn he thought he saw in 1789, and which, until August 2, 1914, had grown stronger with the progress of enlightenment and the discoveries of science—this dream vanished for me before those trainloads of little children. And yet, I was still thousands of miles away from thinking that they were to be fuel for the gas chamber and the crematory.''

    This failure, however, has not led to a reconsideration of the value of religious faith, from which reason sought absolute freedom. Religious faith today is still considered partly responsible for creating that intolerant absolutist way of thinking which leads to such inhuman situations. Instead, the failure of the dream of human progress based on reason has led to a rejection of reason itself as capable of grasping reality. Ambiguity has become the treasured value in our thinking and speaking. Is this the proper response to the totalitarian ideologies which have been the plague of this century? I don't think so. On the contrary, this lack of confidence in reason paves the way for new forms of intolerance.

    Let me explain. In a strikingly prophetic essay written before the Holocaust, Emmanuel Levinas described what he called ''Hitlerism'' as an ''awakening of elementary sentiments.'' These, he argued, ''express the primordial attitude of a soul before the totality of the real and of its own destiny.'' This attitude or stand before the totality of reality is what is meant by the religious sense. In effect, Levinas was saying that the Nazi ideology originated in the religious imagination.

    The religious imagination is born in the human heart's thirst for meaning, for certainty, for a deeper and deeper vision into those mysteries that surround us and break upon us unexpectedly in crucial moments of life. The human heart will always reach out to infinity, and nothing which forces man to suppress or crush this desire will ever satisfy human needs. This passion for infinity is the religious sense. But if we do not know how this passion for infinity can be adequately pursued, it will construct for itself what have been called cases of ''bad infinity'', these used to be called ''idols'', leading to ideological intolerance and political oppression. The Holocaust is what can happen when the religious sense is separated from its orientation to the truly infinite.
 Page 85       PREV PAGE       TOP OF DOC

    My concern is this: The contemporary disdain for the capacity of human reason abandons the religious sense to the irrational, paving thus the way for the worship of those idols of racial, ethnic or national identity which led to the Holocaust and other barbarous planned and systematic horrors so characteristic of our century.

    And so the alternative for the rationalism of the modern dream is not the limitation of reason, but a true understanding of it as precisely the capacity to take us to the portal of that truly transcendent Mystery for which the religious sense thirsts.

    In the book ''The Religious Sense'', Luigi Giussani defines reason as a ''relationship with the infinite that reveals itself as the need for a total explanation. Reason's highest achievement,'' he writes, ''is the intuition that an explanation exists exceeding the measure of reason itself.'' That is the totalitarian temptation is overcome by reason's insistence that the truly infinite will always remain infinite. The religious sense, guided by reason, will thus reject as false all idols created by the human mind. The fundamental authentic religious posture is always, always humility.

    True, the temptation to idolatry remains. Somehow, we refuse to open ourselves to a reality that we cannot control. Thus, the derailment of reason and the corruption of the religious sense. Then, should the mystery reveal itself, it must appear as undeserved grace.

    Remembering his meeting with Elie Wiesel, Francois Mauriac writes: ''Did I affirm that the stumbling block to his faith was the cornerstone of mine, and that the suffering of men was in my eyes the key to that impenetrable mystery whereon the faith of his childhood had perished? Zion, however, has risen up again from the crematories and the charnel houses. The Jewish nation has been resurrected from among its thousands of dead. It is through them that it lives again. We do not know the worth of one single drop of blood, one single tear. All is grace. If the Eternal is the Eternal, the last word for each one of us belongs to him. That is what I would have told this Jewish child,'' he said.
 Page 86       PREV PAGE       TOP OF DOC

    But Mauriac did not. Because the religious sense guided by reason ends at the portal of grace, Mauriac writes that instead of telling him what he had come to believe and understand through his faith, ''I could only embrace him, weeping.'' That is how authentic religious faith responds to the Holocaust.

    Thank you.

    Chairman LEACH. Thank you, Monsignor. And I thank the entire panel.

    Let me begin by saying that these hearings that we have been holding have been widely covered in Europe in particular, and there is a great deal of sensitivity about another country looking at the history of events that largely didn't occur on its shores, although this country was a participant. There has also been great sensitivity of applying not only the hindsight of history but a new set of values to a prior circumstance.

    Are there basic values that make this kind of review fair to the countries that were most involved at this time? Particularly, there is an understood sense that Germany is the precipitator of certain events but that neutrals hold accountability as well. And so would any of you suggest that it is fair or unfair that there be a review of neutrals today; and that that there are values that are not simply one of hindsight that can be applied that make this a credible circumstance for the world to look at at this time?

    Would anyone care to comment on this problem?
 Page 87       PREV PAGE       TOP OF DOC

    Yes, Rabbi.

    Rabbi BAKER. I think one of the main efforts that is being undertaken is as much to encourage or prod these countries to look at their histories themselves, and not only as an effort to be undertaken by the U.S. Government or by the State Department historian. And I think it is appropriate, certainly, for this country to take that role. In particular, in fact, that this is a Nation that itself is composed of immigrants, in many cases, from these same places.

    I think the process, though, has to be one where there is a cooperative undertaking and spirit that recognizes that only by truthful analysis of this history can a proper foundation be built for successive generations. If in the course of this it is also possible to restitute looted assets and to tally such accounts, clearly that is the interest of many of the people involved here. I think that is significant as well.

    But one should not overshadow the other. Both these tasks seem important.

    Monsignor ALBACETE. I think, also, concerning your first question, one should also realize that it would be wrong, I think, before a reality of this kind to separate all the human beings in the planet globally. So that, say, it is only a problem with this nation or that nation or another nation. I think, in addition to our national identity, we have a global identity, a responsibility for the human race. And, in that sense, I think if it is pursued with the required humility that I tried to underscore, I think, actually, it is a wonderful thing to take the leadership and bring questions of this kind before the family of nations, without being concerned that one is interfering with them. I think this idea of interference has to end at a point when we are speaking about our common humanity. Our common humanity.
 Page 88       PREV PAGE       TOP OF DOC

    And on the second point, if we are unable, again in a humble way, in appealing to reason through the capacity of understanding, if we are not able to grasp the realities of values that apply in the past and will apply in the future, then we have a very serious problem, as I tried to say in my presentation.

    Chairman LEACH. Let me ask Professor Larrimore, who is an expert on German philosophy. One of the oft-noted aspects of the Holocaust is that the country that precipitated it was probably as central as any country in the world at the time in terms of advancement of aspects of culture, from the arts, to literature to philosophy; and, therefore, the comments that have been made about the human condition and the human soul at this hearing really relate to the fact that any country can fall victim to this sort of circumstance or any people.

    Do you have any observations on that issue?

    Mr. LARRIMORE. Let me say that part of the reason why I think there was such protestations of disbelief at the extent, the enormity, of the evil perpetrated by the Nazis was precisely because it happened in Germany rather than in some country in which the international community would perhaps have been less surprised to find various forms of barbarity.

    I tried to suggest in my remarks that the first World War had already begun to eat away at the confidence in the civilization of western culture. So that I don't think there was very much that happened in Germany after about 1932, at the latest, that would have—I don't believe that people in this country, for instance, were looking to Germany at that point as a standard bearer for civilization.
 Page 89       PREV PAGE       TOP OF DOC

    Chairman LEACH. Other than in the arts.

    Mr. LARRIMORE. Other than in the arts, I suppose.

    Chairman LEACH. It was an extraordinary—they had the Blue Writers school, they had Munich and Dresden, centers for arts not only of Germany but refugees from Russia.

    But, please, go on.

    Mr. LARRIMORE. That is all I will say at this point.

    Would you like to add anything?

    Ms. BATNITZKY. I think this goes to the question of what human beings' capabilities are. I think a number of people spoke to this question. Does it mean if Germany was the height of civilization, now we say civilization, and many people have argued this, now we say civilization was just a myth. Reason was just a myth. The enlightenment was just a myth. I think a lot of scholars are moving away from those kind of oversimplifications.

    I would say that that has been a change, and I think a change for the good, because both reason and irrationality are much more ambiguous. It is not a black and white situation. Which doesn't mean we can't make moral judgments, but it does mean we have to try to understand the complexity of situations. I think that is what, to me at least, is very provocative and very encouraging about this hearing and the report that was presented today, is because it does try to get at precisely the complexity and the case-by-case issues for each country.
 Page 90       PREV PAGE       TOP OF DOC

    And to go back to the first question you asked about whether or not we are applying a different standard to two countries that did not exist 50 years ago. I think in that sense that the answer has to be no. I think that the real moral question doesn't have to do, at this point, with what happened in the past, but it has to do with the way in which we deal with it in the present. It has to do with how we deal with it in the present; how we take responsibility for it in the present; and, as a number of people reiterated earlier at the first part of this hearing, it has to do with the way in which we educate our children in the future.

    Chairman LEACH. Thank you.

    Mr. Vento.

    Mr. VENTO. Well, thank you, Mr. Chairman. We have our distinguished authors and learned scholars here today to give us advice on whether or not we should continue to seek research and scholarly endeavors in terms of this particular focus.

    One of the things that sticks out, and we are going to mark a bill up on a commission shortly here, I believe, but it sort of focuses on governments and sort of—well, it doesn't sort of, it does, in fact, talk about the legal implications, the ownership, possession and other issues of this nature. But it seems to me there is sort of a dichotomy in terms of the way this legislation moves and some of the aspects of the report that we have before us. As opposed to attempting to deal with the moral issue and whether or not that has been cultivated adequately in light of this episode in human history, this sad episode in human history, which was probably a recurrence, but this one especially we think of in modern history, we talk about reason, which is sort of a cognitive construct. It seems somewhat malleable in terms of how it is applied.
 Page 91       PREV PAGE       TOP OF DOC

    So I think the question that occurs in my mind is, yes, we can go through these legal definitions of property and deal with and discover insurance companies and others, institutions, both public and private institutions, that, in fact, acted improperly in terms of property, but the moral question to me, and the question I have is, is this adequate and what is being done independently?

    It seems as though this episode of investigation into so-called Nazi gold has obviously tripped over into other questions of what other institutions were doing in the broader sense, in terms of culture and other institutions, religion and others, and what their role was. And my question is, really, is this, in fact, causing a revisiting and a reevaluation of some of those roles in history? Maybe in 1945 it was not easy to talk about that, but now that we are drawing back from it.

    Someone said to me, when I spoke at an event some years ago that has stuck with me. I am from Minnesota and we were dedicating the new historical society building, which is really a beautiful structure. And he said, ''Historians are the most powerful people in the world, because not even God can change history, but they can by what they write.''

    So my question is, really, we are dealing with the legal side of this and the property rights and so forth, as I said, the ''Nazi gold''. What about the other side of it? Is there actually a Renaissance going on in terms of a reawakening, as it were, of some of the other roles of other institutions?

    Because I look at places like the former Yugoslavia, and I see some institutions there that I don't believe fulfilled their responsibility in 1990. They are not fulfilling their responsibility. In fact, if anything, you might say they are operating on the opposite side of fulfilling responsibility.
 Page 92       PREV PAGE       TOP OF DOC

    Any comments by our distinguished scholars?


    Monsignor ALBACETE. Well, I can only speak for myself. I know my own church, as you know, in preparing for the year 2000, the present Pope has asked and taken the initiative in some areas, more to come, that we come to terms with our history and with the infidelities in it between what we say and what we have done.

    The statement that came out recently on the Holocaust by a commission put together to draft this statement did not receive universal acclaim. There were great concerns about it, that it did not do enough, but it was a step, a step forward. Rereading it now, in preparation for this meeting, months later, I can see how that step was there. Perhaps one hoped for something more clear, more bold, but then it is not the last time this is going to be treated, in any case. It will be treated by the Holy Father himself personally in the year 2000. So, yes, I think that is going on.

    The appearance and the attention given to the Holocaust museums and memorials, I think that is a wonderful example, again, of keeping this memory alive. History requires that that be kept alive. So I could always say it would be wonderful to have more, but I am not afraid that nothing is being done. I think the coverage given to this very committee, to include some people like us in part of this hearing, this cause, I think it was a magnificent and wonderful idea and should set an example for other kinds of government investigations.

 Page 93       PREV PAGE       TOP OF DOC
    Chairman LEACH. Let me ask if anyone else wants to address the panel of witnesses.

    If not, let me thank all of you, and just conclude by noting Father Albacete said that he might have been greeted with some humor that he was going to give advice to a committee on banking. The English writer C.P. Snow once wrote about two cultures, this being between literature, math and the sciences, and I think we in public life have to be awfully concerned that there is not a great divorce between whether it be moral theology or philosophy and public service. And, at the same time, we have to be very careful to assume that we know how to integrate the two with any great certitude.

    But in any regard, let me thank you all. You have provided a most extraordinary perspective on a most extraordinary subject. Thank you.

    [Whereupon, at 1:45 p.m., the hearing adjourned.]